‘We’ve got to nationalize SpaceX’: Observers say company is too powerful as it dominates military contracts and allegedly impedes Ukraine's defenses

“Unfortunately, we can’t use Starlink or Starshield technology on our territory today to shoot down jet-powered Shaheds,” Zelenskyy said during an online exchange with reporters, referring to a type of drone. He said, according to CBS News, “They fly, and we can stop them with aircraft and other air defense, but we don’t use Starlink for that, unfortunately.”

Zelenskyy said he was told the restrictions were due to technical issues, although the systems appeared to be working normally across the European Union. Ukraine’s Defense Ministry has also tried to contact SpaceX about the problem, without success.

“Nobody there is answering our military,” he said.

According to CBS reporting, Secretary of State Marco Rubio told reporters that Starshield is “not at this moment available to Ukraine,” adding, “That’s under conversation. It’s under discussion right now about how they would want to use it.”

Rubio said the U.S. government was not responsible for the service outage in Ukraine.

“I’m not sure Zelenskyy knows what he’s talking about,” he said.

For some critics, Zelenskyy’s account is evidence that SpaceX has too much control over military operations.

“We’ve got to nationalize SpaceX. We have no choice,” Lindsay Beyerstein, an investigative journalist and staff writer for In These Times, wrote on Bluesky. “We can’t operate our military without them and we can’t trust them to serve our national interest. There is literally no other option.”

For now, bringing some or all of SpaceX under the control of the federal government would be complicated. The company debuted on the Nasdaq in June with a record-breaking initial public offering and has since grown to an approximately $2 trillion market capitalization.

Yet SpaceX’s relationship with Washington remains substantial, even as its commercial business expands. Based on regulatory filings, an estimated 20% of the company’s revenue comes from U.S. government contracts, down from more than 80% in the early 2020s, according to The New York Times.

But that dependence cuts both ways.

How dependent is the US military on SpaceX?

The U.S. military relies on major defense contractors such as Boeing (NYSE:BA) and Lockheed Martin (NYSE: LMT), but SpaceX has become particularly important for satellite communications and national security launches.

SpaceX has competitors, including established satellite communications companies such as SES, Iridium Communications and Viasat. But none currently matches the scale of its Starlink satellite network, which had more than 11,000 satellites in low-earth orbit as of October.

SpaceX’s lead is also evident in Pentagon contracts. According to Air & Space Forces Magazine, SpaceX received most of the $660 million in orders awarded under the Space Force’s Proliferated Low Earth Orbit (PLEO) program as of 2025, despite 20 approved vendors.

Musk’s company also holds the lead in military rocket launches. In April 2025, the U.S. Space Force selected SpaceX for 28 of 54 planned national security missions and awarded it a contract worth up to $5.9 billion. United Launch Alliance received 19 missions, while Blue Origin received seven.

More recently, SpaceX secured $4.2 billion to develop hundreds of missile-tracking satellites for the Pentagon’s Golden Dome program, according to The Wall Street Journal.

Against this backdrop, replacing SpaceX would be difficult. Washington has other defense contractors, but few can match its capabilities in satellite communications, military launches and missile-tracking systems.

Could Washington actually nationalize SpaceX?

Nationalizing a $2-trillion publicly traded company would be an expensive and legally complicated undertaking.