$300 Million in Pentagon Loans Targets SpaceX Rivals

The Pentagon has directed $300 million in loans to two commercial launch companies.

The funding targets competitors of SpaceX, which is planning to phase out its Falcon rocket line.

The Office of Strategic Capital announced a $150 million conditional loan commitment to Stoke Space on October 26. On November 10, military officials disclosed a separate $150 million loan for Rocket Lab. These two companies are the first launch providers to receive backing from the office.

The Office of Strategic Capital was established in 2022 to finance technologies vital to national security. It has also directed hundreds of millions of dollars toward businesses working on batteries, drones, and semiconductors. Commercial satellite tracking provider LeoLabs recently received a $150 million loan to produce and deploy radar units.

SpaceX is shifting its focus to Starship, its next-generation super-heavy-lift rocket. The company has stopped accepting commercial orders for Falcon 9 missions scheduled after 2028. Government customers, however, will continue to use the rockets. NASA and the US Space Force expect Falcon 9 and Falcon Heavy missions to carry on for a longer period.

Under the current launch contract, the military can order Falcon 9 and Falcon Heavy missions through 2029. Those launches could take place through 2033. SpaceX plans to retire the Falcon program permanently after that date, provided Starship delivers on its promised capabilities.

Starship could eventually carry national security payloads. Those missions are not SpaceX's immediate priority. The company is using Starship's large cargo capacity to launch its own Starlink Internet satellites and Starmind orbital data centers. The Pentagon's financing arrives while SpaceX pursues a transition that depends on Starship's performance.