Lawmakers Seek Pentagon Probe of SpaceX Over Potential China-Linked Investment

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Two senators are urging the Pentagon to find out whether investors tied to China hold stakes in SpaceX, one of America’s most important defense contractors and a key provider of military launch services.

In a Feb. 5 letter to Secretary of War Pete Hegseth, Sens. Elizabeth Warren (D-Mass.) and Andy Kim (D-N.J.) said recently unsealed court records and media reports raise concern about whether Chinese money reached SpaceX through intermediaries and offshore entities.

“These [alleged] ties could pose a national security threat, potentially jeopardizing key military, intelligence, and civilian infrastructure,” they wrote.

The senators argue it could trigger U.S. safeguards meant to keep foreign adversaries from gaining leverage over companies that handle sensitive national security work.

Warren and Kim cited media reports describing a market for SpaceX shares that allegedly included Chinese investors, sometimes using middlemen and structures in places such as the Cayman Islands and the British Virgin Islands.

Iqbaljit Kahlon, who managed the fund, had admitted Leo Investments, a publicly traded Chinese company, as a limited partner.

SpaceX told Kahlon the fund could not purchase shares if Leo remained involved, prompting him to remove the investor and return its $50 million. The fund was structured as a special-purpose vehicle (SPV), a common way for investors to pool money to buy shares in private companies like SpaceX. SPVs let multiple investors combine capital into a single ownership stake, making it easier to trade smaller slices of stock without the company having to deal with a large number of individual shareholders.

In the letter, the senators said that as SpaceX is privately held, the public can’t see how much of the company is owned by China-linked investors or whether any such holdings are large enough to influence the company.

Space Force’s “Lane 2” missions are its highest-priority launches, carrying the most demanding, least risk-tolerant national security payloads—often major military and intelligence satellites—into harder-to-reach or higher-energy orbits with complex security and integration requirements.

The senators warned that Chinese investors could “potentially gain access to nonpublic information about the company, including ‘details on its contracts or supply chain,’ giving China access to information and technology that could undermine US national security.”

The Pentagon’s security arm, the Defense Counterintelligence and Security Agency (DCSA), defines a company as operating under FOCI when a foreign interest has the power—directly or indirectly—to shape management or operations in a way that could enable unauthorized access to classified information or harm performance on classified contracts.

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