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Pentagon Pressed to Review SpaceX Over Alleged Chinese Investment Links

By  |  February 5, 2026

Two Democratic U.S. senators are urging the Pentagon to immediately review SpaceX following allegations that Chinese investors may have secretly obtained stakes in the private rocket company, raising concerns about potential national security risks, according Reuters.

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    In a letter sent on Thursday to Defense Secretary Pete Hegseth, Senators Elizabeth Warren and Andy Kim warned that undisclosed foreign investment tied to China could undermine U.S. security interests. The lawmakers wrote that such involvement could pose “a national security threat, potentially jeopardizing key military, intelligence, and civilian infrastructure,” according to Reuters, which reviewed the letter.

    The senators pointed to media reports and court testimony indicating that investors with links to China may have used offshore entities in the Cayman Islands and the British Virgin Islands to conceal their purchases of SpaceX shares. Per Reuters, the senators said these arrangements may have been designed to obscure the true source of the funds and avoid regulatory scrutiny.

    Founded by Elon Musk, SpaceX plays a major role in U.S. national security, launching military and intelligence satellites and operating the Starlink satellite communications network. Starlink is used by the Pentagon and has supported Ukraine’s defense efforts, according Reuters. The senators argued that even limited Chinese ownership could trigger U.S. foreign ownership, control or influence rules, known as FOCI, because of the risk of exposure to sensitive technologies and information.

    Read more: Trillion-Dollar Tech Giant? Musk Weighs Combining SpaceX, Tesla and xAI

    In their letter, the lawmakers asked the Department of Defense to disclose any known Chinese ownership in SpaceX, evaluate whether the company is subject to FOCI mitigation requirements, and determine whether foreign investments should be reviewed by the Committee on Foreign Investment in the United States. They requested a response by February 20, per Reuters.

    The senators also highlighted SpaceX’s recent acquisition of xAI as a factor increasing the urgency of the review. Musk has described xAI as “the most ambitious, vertically integrated innovation engine on (and off) Earth, with AI, rockets, space-based internet, direct-to-mobile communications, and the world’s foremost real-time information and free speech platform.” According Reuters, the lawmakers said the deal further heightens concerns about the potential impact of foreign investment.

    Separately, a Delaware court last year upheld a fund manager’s decision to remove a Chinese investor from a fund created to buy SpaceX shares, according to court filings cited by Reuters. The manager, Iqbaljit Kahlon, had admitted Leo Investments, a publicly traded Chinese company, as a limited partner. SpaceX later told Kahlon that the fund could not proceed with purchasing shares if Leo remained involved, leading to the investor’s removal and the return of its $50 million investment.

    Source: Reuters