Two Democratic U.S. senators have urged the Pentagon to launch an immediate review of SpaceX. This follows allegations that investors linked to China secretly acquired stakes in the company, potential posing risks to national security.
In a letter seen by Reuters, Senators Elizabeth Warren and Andy Kim asked Defence Secretary Pete Hegseth to examine the matter, warning that undisclosed Chinese investment could threaten sensitive military, intelligence and civilian infrastructure.
The lawmakers pointed to media reports and court testimony suggesting that funds tied to China were channelled through entities in the Cayman Islands and British Virgin Islands to conceal purchases of SpaceX shares.
Founded by Elon Musk, SpaceX plays a critical role in U.S. national security, launching military and intelligence satellites and operating the Starlink communications network, which is used by the Pentagon and to support Ukraine’s defence.
The senators said any Chinese ownership could trigger U.S. rules on foreign ownership, control or influence, known as FOCI, due to the potential exposure of sensitive technologies and information.
According to court testimony, fund manager Iqbaljit Kahlon acknowledged that Leo Investments, a publicly listed Chinese company, had been accepted as a limited partner in one investment fund. SpaceX later told Kahlon the fund could not buy shares while Leo remained involved, leading to the investor’s removal and the return of its $50 mln contribution.
The fund was set up as a special-purpose vehicle, a structure commonly used to pool investor capital for buying shares in private companies.
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