Washington Breaks Out the Magnifying Glass After Warren Accuses SpaceX of China Entanglements

SpaceX may be busy figuring out how to beam solar power into orbiting data centers… but it suddenly has a much bigger question to answer here on Earth.

Two U.S. senators are urging the Pentagon to review whether SpaceX has taken on Chinese-linked investment and whether that ownership could pose national security concerns.

In a letter obtained by Reuters, Senators Elizabeth Warren and Andy Kim asked the Department of Defense to conduct an immediate review of SpaceX’s ownership structure. They cited reports and court testimony suggesting that investors with ties to China may have routed money through offshore entities in the Cayman Islands and British Virgin Islands to acquire stakes in the company.

The concern stems from SpaceX’s role in U.S. national security. The company launches military and intelligence satellites and operates Starlink, which is used by the Pentagon and has played a key role in supporting Ukraine’s communications during the war. Lawmakers argue that even indirect foreign ownership could expose sensitive technologies or information.

The senators pointed to rules governing Foreign Ownership, Control, or Influence, known as FOCI, which are designed to prevent adversarial governments from gaining leverage over companies involved in defense and critical infrastructure. They asked the Defense Department to determine whether SpaceX is subject to FOCI mitigation requirements and whether any foreign investment should be reviewed by the Committee on Foreign Investment in the United States. They requested a response by February 20.

Ownership questions are harder to untangle because SpaceX is a private company. Shares often change hands through special-purpose vehicles, or SPVs, which pool investor money to buy stock. These structures are common, but they can obscure the identity of individual investors, particularly when offshore entities are involved.

There is huge precedent for concern. A Delaware court last year upheld a fund manager’s decision to remove a Chinese investor from an SPV created to purchase SpaceX shares. After learning that a publicly traded Chinese company had been admitted as a limited partner, SpaceX told the fund it could not proceed unless the investor was removed. The investment was ultimately returned.

The issue has gained urgency following SpaceX’s recent integration of xAI, which expands the company’s reach into artificial intelligence alongside satellites, communications, and launch services. Lawmakers argue that this broader footprint increases the potential risks tied to ownership and influence.

SpaceX has not commented publicly, and the senators did not claim that China owns or controls the company. Their argument is that even small or indirect stakes, if not properly disclosed or reviewed, can raise regulatory and security concerns. Although I’m sure Elon would argue this is nothing more than a witchhunt.

At the time of publishing this article, Stocks.News doesn’t hold positions in companies mentioned in the article.