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Home»Defense»China owns the ‘narrative’ of future conflict if the US crushes the satellite imagery biz
Defense

China owns the ‘narrative’ of future conflict if the US crushes the satellite imagery biz

Tim HuntBy Tim HuntJune 4, 20257 Mins Read
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China owns the ‘narrative’ of future conflict if the US crushes the satellite imagery biz

Congress is weighing potential reductions to the National Reconnaissance Office’s budget for acquiring commercial satellite imagery—a move that could set the U.S. remote sensing industry back significantly and provide China with an advantage in the influence domain and on the battlefield. 

The stakes extend far beyond any single contract. China is rapidly building out its commercial satellite imagery industry and aggressively seeking new clients. And though European countries are unlikely to become reliant on Chinese imagery, the same cannot be said for governments in Africa, Asia, and Latin America. If China can offer comparable imagery at lower cost, Chinese companies will gain more customers—and accelerate innovation at a pace that U.S. firms may struggle to match.

That could leave U.S. adversaries in control of how the world perceives developing conflicts, warned Kari Bingen, director of the Aerospace Security Project at the Center for Strategic and International Studies and former deputy under secretary of defense for intelligence.

“If Chinese companies end up leading in this area, they would be positioned to become the partner of choice, to undercut our companies in the global marketplace, and ultimately could control the narrative of what happens on Earth,” she said. “On February 23, 2022, instead of Western companies publicly releasing imagery of the buildup of Russian forces along the Ukrainian border—and marrying that with intelligence on what we anticipated—imagine if those images and that narrative had come from China?”

Concerns stem from a proposal the Trump administration is weighing to reduce funding for NRO’s Electro-Optical Commercial Layer program by 30 percent next year—a drop from $300 million a year to $200 million, SpaceNews first reported. NRO also did not request any funding at all for its commercial radar program in 2026, despite expectations that it would ask for about $30 million in 2026, according to industry and congressional sources.

NRO usually doesn’t prioritize requests for commercial because officials know Congress will add money there through the appropriations process, according to one congressional staffer.

So it’s likely—but not certain—that lawmakers will add back the funding this year. But the staffer warned that this year’s budget will be “really, really tough,” and likely involve major cuts, since the administration is banking on the passage of the reconciliation bill to fund the Defense Department.

The EOCL contract is a 10-year program worth almost $4 billion, with Maxar holding the largest share, and BlackSky and Planet Labs holding smaller pieces. If the proposed 30 percent cut is spread equally between all vendors, it could be “catastrophic” for Maxar, because the company heavily relies on NRO for revenue, the staffer said. But if NRO opts to fully fund Maxar, BlackSky and Planet would bear the brunt of the reduction.

The proposed EOCL cut was first brought up publicly by Rep. Seth Moulton, D-Mass., during a May 14 hearing at which he cited a “rumor” that NRO had slashed commercial imagery funding lines in the 2026 budget, at the direction of OMB.

NRO director Chris Scolese didn’t confirm or deny the rumor during the hearing, but said, “We very much value the commercial capabilities, and intend to keep on using those.” Asked about Scolese’s remarks, a spokesperson for NRO declined to comment and said the specifics of the NRO budget are protected.

One industry executive described the proposed cuts as not only “reprehensible,” but also unexpected, since President Trump released an executive order directing the Defense Department to use commercial solutions wherever possible.

Other executives argued that the move further proves the government isn’t a reliable partner to industry—especially since companies have been scaling up their offerings in response to previous government encouragement to expand commercial.

The cut likely wouldn’t be fatal, the executive said, but companies are relying on Congress to “do the right thing” and add the money back to the budget.

The narrative of conflict

For a glimpse into how vital commercial satellite imagery has become, look no further than the war in Ukraine, where companies like Maxar and Planet have provided critical satellite images and data to Ukraine that have helped them defend against Russian aggression.

The fact that Ukraine remains a sovereign nation is due in part to the release of commercial satellite images showing Russian forces massing on its borders in February 2022. The decision to share those images helped the United States persuade allies—and much of the world—to disregard Moscow’s claims that it had no intention of invading, and contributed to a coordinated response from allied governments, which quickly mobilized military aid and imposed economic sanctions against Russia, said David Gauthier, who led commercial operations at the National Geospatial-Intelligence Agency at the time. 

The NGA worked alongside the NRO to ensure that imagery and related data were available: The NRO procured the images, while Gauthier oversaw the acquisition of analysis and other data.

“We actually worked pretty well together to instill long-term vision in industry that the government would be a good customer in this effort,” Gauthier said.

Newer space-based capabilities—like synthetic aperture radar, or SAR—also helped Ukraine monitor Russian forces, providing intelligence despite cloud cover and concealment, such as what Russia used during 2021 military exercises.

“The Ukrainians could use that radar imagery to understand convoy movements at night and track Russian tanks under clouds,” Gauthier said. “They could use that to defend themselves better and maybe pre-position their forces to be better at defending their homeland from this invasion.”

U.S. military leaders, along with partner militaries, are asking for such capabilities more and more frequently, said Dan Smoot, CEO of Maxar, during a panel at the Special Competitive Studies Project’s AI forum on Tuesday.

“There is an increased demand. Unfortunately, the world has got geopolitical challenges right now,” Smoot said.

Asked about potential budget changes, Smoot pointed to rising demand from European governments that could help fill the gap.

“We’ve seen a lot more countries lean in—really driving their own capabilities,” he said. “We’re seeing the [European Union] really step into wanting to have their own intel and defense capabilities at this point.”

That push is driving new partnerships, such as one announced Wednesday between Maxar and Saab aimed at enabling satellite imagery collection even under conditions where GPS is jammed or denied.

Still, Gauthier cautioned that European enthusiasm won’t immediately replace the U.S. government’s central role. “The U.S. government is the single largest customer for this data in the world,” he said. “So you can never discount the fact that the biggest customer plays the biggest role in the fate of these companies.”

And while NATO member states are eager to build sovereign satellite imagery capabilities, their budgets remain limited, said Tomáš Hrozensky, a senior researcher at the European Space Policy Institute.

“Europe is investing 0.07% of its GDP—or about €14 billion per year—in space activities, almost exclusively in the civil domain,” Hrozensky told Defense One. “The U.S. is investing 0.24% of its GDP, via NASA and the defense sector on comparable levels.”

Bingen said U.S. export controls—especially International Traffic in Arms Regulations—make American companies less competitive globally. 

“While international markets are a growth area—providing commercial space capabilities to allies and partners—our companies are hampered by restrictions, especially SAR and [radio frequency] providers, that reduce their competitiveness,” Bingen said. “So it’s a double whammy to our commercial companies.”

A European defense official speaking on background said NATO member nations are urgently discussing how to build a more autonomous commercial imagery sector. That discussion is expected to feature prominently at the upcoming NATO summit later this month. But for now, Europe remains reliant on U.S.-based commercial satellite imagery providers.

And a March decision by the White House to temporarily pause intelligence sharing with Ukraine—and prevent NATO allies from redistributing data purchased from U.S. commercial firms—has eroded trust, the official said.

“All of these relationships between all these nations are built on trust, and we cannot deny that there has been a breach of that trust,” they said.



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