NASA should remember how it helped SpaceX become what it is today

Opinion>Opinions - Technology The views expressed by contributors are their own and not the view of The Hill NASA should remember how it helped SpaceX become what it is today Comments: by Mary Guenther, opinion contributor - 07/08/26 12:30 PM ET Comments: Link copied by Mary Guenther, opinion contributor - 07/08/26 12:30 PM ET Comments: Link copied

Title: SpaceX Crew Launch Image ID: 25212479645131 Article: Astronauts, front row from left, Mike Fincke, of NASA, and Zena Cardman, of NASA, back row from left, Oleg Platonov, of Russia and Kimiya Yui, of Japan waves as they leave the Operations and Checkout Building for a trip the Kennedy Space Center's Launch Pad 39-A and a planned liftoff on a SpaceX Falcon 9 rocket Thursday, July 31, 2025, in Cape Canaveral , Fla. (AP Photo/John Raoux)

Astronauts, front row from left, Mike Fincke, of NASA, and Zena Cardman, of NASA, back row from left, Oleg Platonov, of Russia and Kimiya Yui, of Japan waves as they leave the Operations and Checkout Building for a trip the Kennedy Space Center’s Launch Pad 39-A and a planned liftoff on a SpaceX Falcon 9 rocket Thursday, July 31, 2025, in Cape Canaveral , Fla. (AP Photo/John Raoux)

If you’re one of the thousands who cashed in on the historic launch of SpaceX’s stock, you owe NASA a thank you. After all, the company’s trillion-dollar initial public offering is a triumph of public policy as well as a testament to Elon Musk’s talents as an entrepreneur.

SpaceX’s rise can be traced back to NASA’s controversial 2004 decision to transition away from its old shuttle program towards a new generation of commercial launch vehicles to get cargo — and eventually crew — to the International Space Station.

The company was chosen to compete to build one of these next-generation rocket systems and eventually produced the Falcon 9, which allows customers from NASA to the Department of Defense to other commercial companies to launch more frequently and for less than was thought possible.

Thanks to these lower launch costs, America is also now home to a broad, vibrant commercial space industry that is the envy of the world, encompassing everything from the low-Earth orbit satellites that provide Internet to rural areas to the remote sensing satellites that help Ukraine stave off Russian aggression.

We need not put SpaceX on a pedestal. There are concerns it has a near-monopoly in the low-earth orbit satellite broadband and launch markets. Musk’s relationship with Donald Trump has made him a political lightning rod and created questions about whether the company has received preferential treatment under this administration. But its success is undeniable.

Unfortunately, NASA seems to have forgotten the formula that helped the Falcon 9 get off the ground, which allows customers to launch more frequently and for less than was thought possible.

That formula is deceptively simple. The government needs to offer companies some initial seed funds to develop new capabilities, provide clear information about what services it plans to buy and only tack on limited engineering requirements. Different inputs can be adjusted up or down to get to the same answer, just like a mathematical equation, but they still need to add up.

In the case of SpaceX, NASA invested $396 million, released periodically as milestone payments for each technical hurdle the company cleared, subsidizing development costs for a rocket that would serve their needs as well as the broader market.

NASA also made clear how many missions it anticipated purchasing from companies participating in the program, allowing SpaceX to attract investors based on expected future revenue. And the program manager successfully fought to limit the number of requirements on the company, allowing for innovation while ensuring the agency’s true needs were met.

More recent programs have stumbled by placing too many requirements on commercial companies, or by failing to offer enough clarity on future purchasing plans, which has limited the success of commercial space programs.

Take NASA’s beleaguered efforts to transition to commercial space stations, which seemingly got off to a strong start when it was announced in 2018, but has since gone off the rails. The government has proposed two major overhauls since 2025, one of which would have completely changed how the new space stations operated and seemingly took for granted that companies could turn around and rewrite their engineering plans on a dime.

NASA has thankfully listened to feedback and indicated that the agency plans to return to the original contracting plan for the stations. But companies still lack a clear picture of the quantity of services NASA intends to buy from the new space station operators and the engineering requirements it expects them to meet, which makes it challenging to attract the private investment needed to get models built and launched.

If the country wants to see more innovative, boundary-pushing commercial space companies attain historic valuations like SpaceX, NASA and other space acquisition agencies need to return to the playbook that they know works. That may or may not add up to another trillion-dollar company, but it will give our nation’s space enterprise the best chance of success.

Mary Guenther is head of space policy at the Progressive Policy Institute.