U.S. Senators Urge Pentagon to Investigate Alleged Chinese Investment in SpaceX
Two U.S. senators have called for an immediate Pentagon review of SpaceX following allegations that Chinese investors have secretly acquired stakes in the private rocket company, raising significant national security concerns.
In a letter to Defense Secretary Pete Hegseth on Thursday, Senators Elizabeth Warren (D-Mass.) and Andy Kim (D-N.J.) warned that undisclosed Chinese investment could pose “a national security threat, potentially jeopardizing key military, intelligence, and civilian infrastructure.” The lawmakers cited media reports and court testimony indicating that investors with ties to China used offshore entities in the Cayman Islands and British Virgin Islands to mask purchases of SpaceX shares.
SpaceX, founded by billionaire Elon Musk, is a critical component of U.S. national security infrastructure. The company launches military and intelligence satellites and operates the Starlink communications network, which is extensively used by the Pentagon and has been vital to Ukraine’s defense efforts. The senators argued that SpaceX’s recent acquisition of Musk’s artificial intelligence firm, xAI, further amplifies the urgency of scrutinizing its ownership structure.
The letter specifically requests that the Department of Defense disclose any known Chinese ownership, assess whether SpaceX is subject to Foreign Ownership, Control or Influence (FOCI) mitigation rules, and determine if the investments should be reviewed by the Committee on Foreign Investment in the United States (CFIUS). A response is requested by February 20.
The senators’ concerns are partly supported by a recent Delaware court case. Last year, a fund manager was backed by the court after removing a Chinese investor, Leo Investments, from a special-purpose vehicle (SPV) set up to buy SpaceX shares. According to filings, SpaceX explicitly told the manager that the fund could not purchase its shares if the Chinese company remained involved, leading to the return of a $50 million investment.
SpaceX did not immediately respond to a request for comment from Reuters.
The allegations highlight ongoing tensions and scrutiny over foreign investment, particularly from China, in sensitive American technology and infrastructure sectors. The Pentagon’s review could trigger formal FOCI mitigation requirements, potentially restructuring SpaceX’s governance to protect classified information.
Reporting by Echo Wang in New York; Editing by Stephen Coates
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