Space Race: National Prestige, Business Opportunities and Espionage Risks

Bradley Intelligence Report

Client Alert


This past week the space race was in full display, with India’s Chandrayaa-3 landing on the lunar south pole. India is now a member of an exclusive club of moon landers, joining the U.S., China and Russia. Governments are pumping money into their space programs, for the prestige and much, much more. In the U.S., NASA has budged $25 billion this year. China spent $12 billion on its space program in 2022. Russia is not saying, but experts estimate Moscow spent up to $250 million on its spacecraft Luna-25, which attempted, and failed, a landing on the south pole days before the Indian success. Beyond the prestige of being the first for a south pole landing, it is a step forward in the grand scheme of establishing a lunar base for future space exploration. The south pole has water, a necessary element to sustain life. The U.S. has two moon landing missions that may launch later this year. Not to be left behind, Japan is expected to launch a probe as early as next month.

Business Investment in the Final Frontier

Space exploration and technology development used to be the business of governments. That is no longer the case – with the Indian success likely to further boost the privatization of the space industry. Not only are costs going down – the Indian Space Research Organization had a budget of $74 million for the Chandrayaa-3 program – current-day applications for space-based solutions are increasing. We have grown dependent upon GPS for navigation and mapping and commercial communications satellites to keep us connected globally. With technological advancements for smart cities, smart transportation grids and smart-yet-to-be-invented industrial and commercial applications, next generation satellites will be an even more important part of our critical infrastructure. Space-based data collection and monitoring are already essential to understanding and mitigating the effects of climate change, from tracking weather patterns, natural disasters and flooding to assessing the impact on availability of clean water, sustainable agriculture and mass migration. Satellites now provide commercial services to track industry-wide logistics and supply-chain operations, illegal fishing and methane emissions. When Russia attempted to impose a communications blackout on Ukraine as part of its war strategy, privately owned satellites provided internet service and smart phone connectivity. Other private satellites provided imaging services documenting mass graves and other Russian atrocities. By 2030, some experts forecast there will be more than 100,000 satellites in orbit unlocking new commercial markets, including debris removal, satellite servicing or solar power generation.

It is estimated that the global space economy will grow from $469 billion in 2021 to more than $1 trillion by 2030, with the U.S. being the main driver of this growth. Private capital is augmenting government contracts to fuel this growth. Since 2015, over $47 billion in private capital has been invested across the space sector. Investments are in all three stages of the space value chain: upstream (spacecraft manufacturing and launch vehicles), midstream (spacecraft operations and in-orbit management) and downstream (data, applications and services). In 2022, one third of the commercial revenue flowed from infrastructure and support for activities in space, such as ground stations used for satellite communications. The remainder came from satellites and satellite data. Over half of corporate investment came from non-aerospace and defense companies in 2022, showing a rapidly expanding and diversified investor base.

But businesses are not the only actors interested in getting in early to capitalize on the emerging technologies for a competitive edge.

Foreign Intelligence Services Target U.S. Space Industry

In mid-August, the U.S. National Counterintelligence and Security Center (NCSC) issued a warning to companies operating in the space industry about the growing threats by foreign intelligence. NCSC noted adversaries understand the importance of the commercial space industry to the U.S. economy and national security, including the growing dependence of critical infrastructure on space-based assets. Foreign intelligence services and their proxies are seeking to steal intellectual property to leapfrog their own programs without the high research and development costs U.S. companies expend for innovation, testing and development. They also seek to compromise and degrade U.S. satellite communications, remote sensing and imaging capabilities. Penetration of commercial space infrastructure also creates vulnerabilities that can be exploited during times of conflict, as the Ukrainians learned the hard way.

The U.S. government is warning about the risks of cyberattacks, attempts to collect sensitive data on satellite payloads, attempts to disrupt satellite communications and other space infrastructure, and attempts to steal data on that could give U.S. adversaries an economic or military advantage. The U.S. is also warning of unsolicited offers to establish joint ventures with companies tied to foreign governments or state-owned enterprises and acquisition or investment efforts by foreign companies secretly controlled by foreign governments. Another threat is attempts to recruit your company’s technical experts, including through invitations to travel to a foreign country, offers of employment (such as moonlighting as consultants), and financial incentives in exchange for proprietary information. 

While the warning does not cite any specific state actor, China and Russia are the primary threats. U.S. counterintelligence officials say the warning is not the result of any one development, but a growing number of attempts by China and Russia to acquire U.S. space-related technology. Given the deterioration of trade relations with both China and Russia, it is likely that Washington will seek to cordon offer the space industry, similar to what the U.S. has done with superconductors, AI and quantum computing technology. Companies operating in the sector should start now, if they have not done so already, to conduct due diligence on their supply chain, joint venture projects and investors to identify risks.