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Bryan Luk

Leonard Luk

If the years 2020 to 2025 were defined by the artificial intelligence (AI) revolution – a period where algorithms helped create tech titans such as Nvidia, OpenAI and Oracle – then 2026 represents a far more exciting and expansive paradigm shift.
We are now pivoting from the digitisation of the Earth to the capitalisation and domination of low-orbit space. The golden age of the space economy has arrived, signalled by last month’s announcement that SpaceX is preparing for a June initial public offering, with a projected US$1.5 trillion valuation and a record-breaking US$50 billion in raised capital. An alliance of Wall Street giants is readying what could be the largest public offering in human history.
Still, beyond the ticker symbols lies a new reality executed by the fusion of SpaceX and the AI start-up xAI. This new ecosystem represents the ultimate frontier, where the boundaries between orbital connectivity and AI infrastructure and application merge into a single trillion-dollar future.
This is no longer merely a race for market share; it is a dual-track competition where private innovation and military strategy have become inextricably linked. While the private sector builds the infrastructure for an emerging orbital economy, national governments increasingly view these commercial networks as the digital high ground.
In this new era, the space race is fought on two fronts. One is by CEOs and venture capitalists seeking the next trillion-dollar breakthrough, and the other is by defence departments securing the orbital assets that now underpin modern deterrence.
In the 20th century, the space race was a duel between the United States and the Soviet Union, with their space programmes serving as instruments of national prestige and military deterrence. It was a contest measured in flag-planting milestones, funded largely by the public purse and justified by the Cold War ideological struggle.


Today’s race looks very different. Instead of monolithic state agencies, a dense ecosystem of private firms is leading the charge. The real metric of power is no longer who reaches the moon first, but who controls the data, connectivity and intelligence flowing through low Earth orbit. This is the era of the dual-use revolution, where commercially branded satellites double as critical military infrastructure.
Publicly listed firms such as US-based BlackSky and Planet Labs were originally providers of geospatial analytics for the insurance, agricultural and logistics sectors. Now, they have expanded to tactical intelligence, surveillance and reconnaissance services for governments and militaries.
One example is BlackSky maximising coverage over Ukraine, delivering near real-time imagery and AI-processed tactical insights to governments and military commanders since 2022. Consequently, what was initially marketed as a tool for commercial business intelligence has been repurposed into a critical tactical asset on the modern battlefield.
Starlink, SpaceX’s satellite internet network, is another illustration of this public-private symbiosis. Initially deployed to keep Ukrainian civilians and institutions online after Russia’s attacks on critical infrastructure, Starlink rapidly evolved into the backbone of Ukraine’s military communications. Ukrainian forces have used the Starlink network to coordinate units, guide tactical drones and maintain command and control amid Russian electronic warfare and cyberattacks.

The US government has moved beyond isolationist procurement, absorbing high-performing companies with non-US roots into its national security architecture. Rocket Lab is the premier case study of this strategic evolution, tracing a trajectory from a bold New Zealand start-up to a major American aerospace player.
Founded in 2006 by Sir Peter Beck, the firm’s rapid ascent caught the attention of US markets, drawing investment from US institutional titans such as BlackRock and Vanguard. This influx of capital brought about a relocation to the US to align with the Pentagon’s security mandates. Through this process of Americanisation, Rocket Lab transformed itself into a US space corporation, one that operates at the highest levels of classified military procurement while retaining its New Zealand heritage.
A milestone in this integration arose in late 2025, when Rocket Lab secured a landmark US$816 million contract from the US Space Development Agency to design and construct 18 missile-tracking satellites, marking the largest contract in company history. This effectively elevated it to the same strategic tier as legacy defence titans such as Lockheed Martin and Northrop Grumman, signalling its complete absorption into the US space and military-industrial complex.
The rapid consolidation of the Western “allied space” strategy is a direct geopolitical threat to China’s pursuit of orbital parity. Under its strategy of military-civil fusion, Beijing has accelerated the deployment of its own megaconstellations, such as the G60 Starlink and Guowang.


However, while China’s approach has traditionally been driven by massive state-owned enterprises, the sheer velocity of US private-sector innovation could create a widening gap. To truly contest US low Earth orbit dominance, Beijing might need to move beyond monolithic state planning and empower its private commercial space sector through decentralisation and empowerment, mirroring the venture-backed agility that has allowed firms such as SpaceX and Rocket Lab to outpace traditional bureaucracy.
As 2026 unfolds, the golden age of the space economy is revealing its true nature: a high-stakes military race where the digital high ground is a physical reality. The coming global warfare will not be defined solely by kinetic weapons, but by the control of the low Earth orbit economy.
This is the era of the trillion-dollar space frontier, where the ability to jam, spoof or disable a competitor’s constellation determines sovereign strength. The line between a commercial symbol and a military tactical asset has dissolved, transforming low Earth orbit into the ultimate domain of modern deterrence and hard power in the current international order.


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US-China orbital arms race is forging a trillion-dollar space economy

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Opinion

China Opinion

News

China

Science

While the private sector seeks the next trillion-dollar breakthrough, national governments race to secure the orbital assets that now underpin modern deterrence


While the private sector seeks the next trillion-dollar breakthrough, national governments race to secure the orbital assets that now underpin modern deterrence.


SpaceX

China's space programme

China technology

Starlink

Ukraine

United States

BlackRock

Lockheed Martin

Expresses the views, ideas and conclusions of the author. (Eg. Enough of Crazy Rich Asians, think of crazy poor Hongkongers.)


US-China orbital arms race is forging a trillion-dollar space economy

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}While the private sector seeks the next trillion-dollar breakthrough, national governments race to secure the orbital assets that now underpin modern deterrence

While the private sector seeks the next trillion-dollar breakthrough, national governments race to secure the orbital assets that now underpin modern deterrence