If the hottest idea in markets is defense business (see Voyager’s IPO last week), the greatest hope of entrepreneurs in the space sector is selling the Pentagon on defense as a service.
Idea men: The Golden Dome missile defense project will include a variety of space-based sensors and communications platforms; alongside terrestrial interceptors, defense planners are also considering the role of space-based missile interceptors in the project.
SpaceX reportedly proposed offering its contributions as a subscription service, rather than the government owning and/or operating space assets built by the company. While the military buys launch, comms and even intelligence as a service in some situations, would it buy missile defense on a subscription basis?
Shooters as a service: Last week, Reuters reported that SpaceX’s role in the project may be threatened by CEO Elon Musk’s tumultuous relationship with US President Donald Trump. However, venture backed defense startups familiar with the joys of software-as-a-service business models will still make the case for subscription based-models wherever they can.
CSIS released a report this month laying out the case for a missile defense service model:
- Key comms and intelligence infrastructure is already operated—and sometimes owned—by private companies, particularly in the space domain;
- These models can provide lower costs through access to private capital;
- Companies controlling their own products can innovate more quickly.
In the loop: Things get trickier, legally and politically, when private actors control weapons directly. Private security contractors in Iraq and Afghanistan were common—and also a source of serious ethical and financial problems. One potential fix for weapons systems like these? Ensuring that a government operator is kept “in the loop” on final decisions—whether made by contractors or AI.
A matter of scale? The CSIS report points to an autonomous anti-drone system being purchased by the Army as a sign that the “Rubicon is already being crossed with thinking machines, instead of humans, making decisions with destructive consequences.”
Still, there’s a difference between a .50 cal with a 5,000 ft range, and thousands of missiles orbiting the planet.
“If this is highly woven into the kill chain, into the overall battle management architecture for the defense of the United States, it seems like it would be highly irresponsible to contract that out,” AEI senior fellow Todd Harrison told Payload.
Harrison said commercial innovation needs to be prioritized in defense procurement, but that doesn’t necessarily require subscription models.
Elephant in the room: The question of contractor reliability becomes more pertinent as government dependence on them increases. Ukraine has complained that SpaceX shut off Starlink services arbitrarily during its conflict with Russia, and Musk suggested he would stop Dragon operations during his tiff with Trump.
“We can’t point to an example of a company cutting off the US government’s access to a service,” Clayton Swope, a CSIS senior fellow, told Payload. “That remains a theoretical boogeyman argument against more use of commercial. The hard evidence actually shows DoD can rely on a commercial service, and bakes terms and conditions into contracts to ensure a service is available when needed.”
