SpaceX and the Defense-Tech Renaissance

SpaceX’s first reusable rocket landing (this brings up memories of when my dad forced me to watch the livestream of it back in 2015).

Quick note — yes, I saw the NYTimes release about how American defense is lagging further behind rival powers than most of us would like to admit. My view in this essay hasn’t changed. If anything, it’s hardened, because whatever fixes we find for that decline will come not from committees, but from the scrappy, occasionally chaotic, and deeply American startup world.

Another note — for a fuller account of how I think about the ethics of defense-tech, I’d point you to Trae Stephens’s essay “The Ethics of Defense Technology Development.” The short version: ethics in defense is not about opting out entirely (that’s too easy); it is about engaging responsibly so that democratic societies, not illiberal regimes, set the rules, deter aggression, and minimize harm.

It has been about two months since I launched this project. For the few people curious about where my ideas come from: mostly podcasts. The majority of what I write begins as something I heard and couldn’t let go of, which is, I think, the whole point — this blog was always meant to be an outlet for thinking through what is going on in the world. As a shameless plug, I have also my “Media that I consume (and that I think you should too)” post to include more VC- and finance-oriented material.

On to the actual point. A few weeks ago, Maura Healey, governor of Massachusetts, announced the launch of the Massachusetts Strategic Hub for Innovation, Exchange and Leadership in Defense (SHIELD), a new initiative to strengthen the state’s defense leadership and accelerate the development of national-security technologies. As part of this effort, she also announced nearly $47 million in funding for military innovation and for expanding microelectronics and chip manufacturing in the state. Massachusetts already sits near the core of the U.S. defense ecosystem: the sector employs over 130,000 people, generates $15.2 billion in annual wages, and drives $48.6 billion in total economic output. It is, by any metric, a small state with a very large industrial shadow. But this is not just a story about Massachusetts flexing. (Though, as a proud Masshole, I could easily write that piece too: go Celtics, I love Drake Maye, etc.) What interests me more is what this signals about a broader shift in how the U.S. thinks about defense innovation and competition.

For decades, the U.S. defense industry has been dominated by a handful of massive “primes”: Lockheed Martin, Raytheon, Boeing, Northrop Grumman. They built extraordinary machines, but they did so inside an ecosystem optimized for scale rather than speed. After the Cold War, a wave of consolidation — encouraged by the Pentagon — pushed the sector toward fewer, larger actors. Budgets shrank, mergers multiplied, and what had once been an ecosystem of hundreds of specialized contractors narrowed into an oligopoly of five or six giants: Northrop absorbing Grumman in 1994, Lockheed merging with Martin Marietta in 1995, Boeing swallowing McDonnell Douglas in 1997.

These primes excelled at complex, multibillion-dollar systems — stealth bombers, missile defense platforms, fighter jets. But their dependence on government contracts and their size made them structurally risk-averse. Risk-aversion, in turn, seeps into process. Procurement became synonymous with paperwork, multi-year timelines, and cost-plus contracts that rewarded compliance over creativity. The system became very good at producing what it already knew how to produce, and comparatively bad at imagining what might come next.

The first real shock to this equilibrium came from SpaceX. While the primes operated inside an intricate, rules-bound procurement regime, SpaceX arrived with almost none of that institutional memory. Armed with a different appetite for risk — and, let’s be honest, a healthy dose of government funding that Elon rarely foregrounds — SpaceX rethought rockets from first principles. Reusability was treated as a live question rather than a cute science-fiction motif. And, somehow, they pulled it off: the rockets landed themselves, and launch costs fell accordingly. The more important shift, to me, is cultural. People were reminded that even the most ossified industries can move when someone is willing to ask naïve questions and run seemingly stupid experiments in public.

A new cohort of defense startups is now pushing that logic further. Companies like Anduril, Shield AI, Hadrian, and Chaos Industries are redefining what it looks like to build national-security technology in the 21st century: short iteration cycles, vertically integrated engineering, automation everywhere, and a willingness to bet on ideas the legacy ecosystem wasn’t structurally able to prioritize. Their work is especially visible in the domain that has become the symbolic center of this new era — drone technology.

I was already interested in drones before I wrote about Ukraine’s defense-tech ecosystem. Part of that interest is philosophical, but part of it comes from Peter Thiel flagging drones as a open category for breakthrough innovation in a conversation with Ross Douthat on the New York Times’ Interesting Times podcast. That observation connects back to his older thesis that America’s innovation engine has slowed, in part because institutions have over-optimized for safety and incrementalism. Drones, by contrast, sit at the messy intersection of AI and hardware, where small teams can still create discontinuous change.

Anduril’s autonomous system, Lattice, paired with Chaos Industries’ work on rugged, field-deployable hardware, illustrates what becomes possible when startups are allowed to invent new operational concepts rather than retrofit old ones. These companies are not just making better drones; they are making defense hardware cheaper, smarter, software-updatable, and deployable at a tempo that actually matches contemporary conflict.

All of this helps explain why capital is suddenly pouring into defense-tech, and why the space feels, for lack of a better word, alive again. For the first time in a long time, it feels like the frontier is open. On that frontier, the Northeast — and Massachusetts in particular — is unusually well-positioned. MIT’s identity was built, in no small part, on defense-adjacent problem-solving in the 20th century. There is no structural reason the region cannot reclaim that role now.

From a more abstract angle, this is a reminder that the “free world” does not stay ahead through bureaucracy or legacy advantage. It stays ahead through the things only open societies reliably generate: risk-taking, creativity, and the willingness to build what doesn’t exist yet. For a long stretch, that energy seemed dormant in defense. Startups are waking it back up. And if the U.S. can cultivate that spirit across states, universities, investors, and founders, it has a real chance to out-innovate autocratic systems that will always struggle to produce originality.

Thanks, as always, for reading. :)