Pentagon urges U.S. space companies to stay vigilant against foreign intelligence on August 18, 2023 at 5:24 pm

Investments, joint ventures, or acquisitions could be vehicles for foreign adversaries to gain a foothold in the U.S. space industry, the Pentagon said in a new bulletin published today.

The new guidance, “Safeguarding the U.S. Space Industry,” warns that foreign intelligence entities (FIEs) could use a range of strategies – including capital allocations – to exploit American space companies. Those attacks could be to harm a company, or to gain access to intellectual property for the benefit of a foreign national space program.

FIEs “see US space-related innovation and assets as potential threats as well as valuable opportunities to acquire vital technologies and expertise,” the bulletin said. “FIEs use cyberattacks, strategic investment (including joint ventures and acquisitions), the targeting of key supply chain nodes, and other techniques to gain access to the US space industry.”

The document, which was published by the Federal Bureau of Investigation, the National Counterintelligence and Security Center, and the Air Force Office of Special Investigations, provides some indicators that could suggest an FIE is targeting a business. These include offers to establish a joint venture with a company tied to a foreign government, or acquisition or investment from foreign companies via wholly-owned subsidiaries registered in third countries.

The Pentagon has made efforts in recent years in “cleaning up” the sources of capital that flow into U.S. space companies, including through venture capital. In 2021, the Department of Defense introduced a Trusted Capital program aimed at connecting companies with vetted sources of cash.

The U.S. also uses established entities, like the Committee on Foreign Investment in the United States, to review some foreign transactions and investments in American companies and block these if they threaten national security. Such was the fate of Noosphere Venture Partners, the fund of Ukrainian investor Max Polyakov, which had a controlling interest in Firefly Aerospace. Polyakov eventually sold that stake to AE Industrial Partners.

​ Investments, joint ventures, or acquisitions could be vehicles for foreign adversaries to gain a foothold in the U.S. space industry, the Pentagon said in a new bulletin published today. The new guidance, “Safeguarding the U.S. Space Industry,” warns that foreign intelligence entities (FIEs) could use a range of strategies – including capital allocations – to