China gains ground in space race as U.S. cuts commercial satellite funds

U.S. dominance in space has long served as a massive force multiplier for the American warfighter. Today, that dominance is increasingly powered by commercial space companies delivering advanced technologies—from daily Earth observation images to satellite-based internet and global telecom networks. These capabilities help our troops navigate, detect, and act faster than adversaries.

But as global tensions escalate, American leadership is at risk—from both foreign adversaries and shortsighted decisions at home.

During a May 14th hearing, Rep. Seth Moulton warned that the National Reconnaissance Office (NRO) had reportedly slashed funding for commercial satellite imagery in the next fiscal budget. These proposed cuts aren’t just a threat to the warfighter and our national security—they also jeopardize the viability of the U.S. commercial space sector.

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From battlefield targeting to situational awareness, today’s missions increasingly rely on persistent commercial satellite coverage. Weakening that capability leads to slower decisions, reduced effectiveness, and greater risk for U.S. and allied forces. These cuts threaten to undermine our intelligence capabilities and weaken our edge in the global space race.

China is wasting no time. Chang Guang Satellite Technology Co. (CGST), a Chinese government-funded commercial imaging company, operates over 100 satellites and an advanced communication architecture, and is positioning itself to disrupt markets, shape global norms, and collect intelligence at scale. This represents a significant advancement in China’s satellite imaging and communication capabilities, and according to Western intelligence officials, Chinese commercial satellites have been used by Russia to image critical Ukrainian infrastructure, including nuclear power plants, in preparation for missile strikes.

This is part of a troubling trend: authoritarian regimes are weaponizing commercial space faster than we are defending against it.

Ironically, our allies and partners often adopt these American-made technologies faster than our own government. Allied defense agencies are incorporating U.S. commercial imagery and analytics more effectively than the very agencies that helped develop them. The RAND Corporation recently cited Ukraine’s use of U.S. commercial space technology as an asymmetric advantage over Russia. Their report concluded: “U.S. policymakers should continue developing robust contract arrangements with commercial space providers.”

Yet less than 1% of combined Department of Defense and Intelligence Community budgets are spent on commercial space. Even senior intelligence officials recognize the problem. Director of National Intelligence Tulsi Gabbard recently noted that government agencies often reinvent tools the private sector has already developed more efficiently. Although commercial satellites generate terabytes of data daily, the government uses only a fraction. Decision-makers at NRO and the National Geospatial-Intelligence Agency (NGA) still prioritize bespoke, classified satellites that take years to build and cost exponentially more than comparable commercial alternatives available now. They also create large, vulnerable targets for adversaries, while dual-use capabilities are far more practically and perceptively resilient.

After the Cold War, America took its space dominance for granted and came to rely on Russian rockets to transport American astronauts. We can’t afford to make the same mistake with commercial satellite technology. While bipartisan support for commercial space innovation exists, it must now be matched with decisive and sustained investment. Instead of cutting vital initiatives, successful programs like the Electro-Optical Commercial Layer (EOCL) must be safeguarded and expanded. Procurement processes must be modernized across defense and intelligence agencies to keep up with fast-moving private-sector technologies. That means sending a clear, consistent demand signal—not the instability of continuing resolutions or last-minute reversals.

Cutting support for commercial space assets also contradicts President Trump’s national security priorities. The president has accurately recognized space as “the next war-fighting domain.” His administration has supported private-sector innovation and issued executive orders favoring commercial-first procurement.

But rhetoric isn’t enough—we need structural reform. Congress often funds commercial programs only for agencies to “reinterpret” the intent and redirect resources toward building bespoke government systems. This raises a critical question: does it make sense to house commercial funding inside agencies that are institutionally incentivized to build their own satellites?

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Congress should consider placing these funds in neutral entities that can acquire and deliver commercial capabilities across government. Agencies can focus on the exquisite systems only they can build, while commercial providers offer scalable, persistent solutions that adapt quickly to battlefield needs.

In his second term, President Trump has a historic opportunity to usher in another era of American space dominance—while giving the warfighter the tools and information they need. But this future hinges on a thriving commercial space sector supported by smart, forward-thinking policy.

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Leaders in Washington must decide: will they let outdated thinking keep the world’s best space technology off the battlefield—and allow China to seize the upper hand? Or will this White House break free from business-as-usual, invest in American commercial space capabilities, and secure our leadership in the most critical domain of the 21st century?

The answer should be obvious—and it is imperative.