Space Investor Sees Opportunities in Defense-Related Startups and AI-Driven Systems

Chad Anderson is the founder/managing partner of the early-stage VC Space Capital (and an investor in SpaceX, along with dozens of other space companies). Space Capital produces quarterly reports on the space economy, and he says today, unlike 2021, "the froth is gone. But so is the hype. What's left is a more grounded — and investable — space economy."

On Yahoo Finance he shares several of the report's insights — including the emergence of "investable opportunities across defense-oriented startups in space domain awareness, AI-driven command systems, and hardened infrastructure." The same geopolitical instability that's undermining public markets is driving national urgency around space resilience. China's simulated space "dogfights" prompted the US Department of Defense to double down on orbital supremacy, with the proposed "Golden Dome" missile shield potentially unleashing a new wave of federal spending...

Defense tech is on fire, but commercial location-based services and logistics are freezing over. Companies like Shield AI and Saronic raised monster rounds, while others are relying on bridge financings to stay afloat...

Q1 also saw a breakout quarter for geospatial artificial intelligence (GeoAI). Software developer Niantic launched a spatial computing platform. SkyWatch partnered with GIS software supplier Esri. Planet Labs collaborated with Anthropic. And Xona Space Systems inked a deal with Trimble to boost precision GPS. This is the next leg of the space economy, where massive volumes of satellite data is finally made useful through machine learning, semantic indexing, and real-time analytics.

Distribution-layer companies are doing more with less. They remain underfunded relative to infrastructure and applications but are quietly powering the most critical systems, such as resilient communications, battlefield networks, and edge-based geospatial analysis. Don't let the low round count fool you; innovation here is quietly outpacing capital.
The article includes several predictions, insights, and possible trends (going beyond the fact that defense spending "will carry the sector...")

• "AI's integration into space (across geospatial intelligence, satellite communications, and sensor fusion) is not a novelty. It's a competitive necessity."

• "Focusing solely on rockets and orbital assets misses where much of the innovation and disruption is occurring: the software-defined layers that sit atop the physical backbone..."

• "For years, SpaceX faced little serious competition, but that's starting to change." [He cites Blue Origin's progress toward approval for launching U.S. military satellites, and how Rocket Lab and Stoke Space "have also joined the competition for lucrative government launch contracts." Even Relativity Space may make a comeback, with former GOogle CEO Eric Schmidt acquiring a controlling stake.]

• "An infrastructure reset is coming. The imminent ramp-up of SpaceX's Starship could collapse the cost structure for the infrastructure layer. When that happens, legacy providers with fixed-cost-heavy business models will be at risk. Conversely, capital-light innovators in station design, logistics, and in-orbit servicing could suddenly be massively undervalued."

War Games

[SchroedingersCat]

Any sci-fi fan would know that AI in military applications is inevitable. There will be some hiccups along the way but humans usually prevail in the end. The ones who survive nuclear winter that is.

Re:

[luvirini]

>The ones who survive nuclear winter that is.

And the robot uprising.

Re:

[ihavesaxwithcollies]

>The ones who survive nuclear winter that is.

And the robot uprising.

Don't forget about the mole people

"Go Cylons!"

[Tablizer]

but humans usually prevail in the end [of sci-fi]

Because a story where the bots flatten or eat every last person wouldn't sell.

How many cheered "Go Cylons!"?

Musk maybe.

What? No asteroid mining?

[50000BTU_barbecue]

Quick! Get on the AI driven space phone and call them up! There's pennies to be made between Mars and Jupiter!

Re: What? No asteroid mining?

[50000BTU_barbecue]

When you put it like that...

'Grounded and investable'='DoD money is here'

[fuzzyfuzzyfungus]

There's always a slightly different way to spin it; but those heroic entrepreneurs always seem to realize that a questionably sensible defense project will be a feast.

The problem with "Star Wars"

[NotEmmanuelGoldstein]

... "Golden Dome" missile shield ...

It's important to remember the biggest attack on the USA, was committed with commercial jet planes. The 2nd and 3rd biggest attacks, were domestic terrorism. This is pork-barrelling much more than it is a sincere attempt to protect the USA. This sort of money could subsidize education and healthcare for the USA and all third-world nations: There would be much fewer reasons to attack the USA, then.

"Star Wars" is trotted out every decade because extra immunity from US-caused war-crimes, is irresistible

The Hype is gone?

[Ol Olsoc]

Every time Spacex launches something, gushing vids and stories are all over the place talking about some new record being set.

And we must now remember that pop culture has finally succeeded where NASA failed. The First All Female Astronaut crew, breaking the atmospheric ceiling showing that women can actually go to space, an achievement that never happened before.

People say they were only going on a ride, not a real crew. But they did do vital tests, and proved that Botox, lip fillers, and breast impla

Re:

[BranMan]

NASA also has been the only one to blow up a female astronaut on launch. Also in the 1980's.