🚀 Space Business: Unrestricted

SpaceX found a new kind of export control problem.

US-educated Chinese experts who couldn’t get visas to stay here are reportedly working on AI in the Middle East, news that generated agita among people who care about maintaining American technology superiority.

With global competition heating up over everything from AI chips to rocket ships, the US will be forced to balance secrecy with its desire to capitalize on know-how from around the globe—a reality dramatized in the recent film Oppenheimer, which depicted the challenge of developing advanced weapons with refugee scientists, some of whom were technically enemy aliens.

American strategists seek to keep advanced technology out of the hands of rivals like China and Russia, but the advantage of an open economy is the free exchange of ideas and the ability to bring together talent from all over the world. It’s not quite working out that way. Sometimes, it’s politics—a Biden-backed immigration bill that would have let more graduates with advanced science and math degrees stay in the country didn’t even come to a vote in the last Congress.


But is it possible that the US aerospace industry is missing out on foreign expertise simply because of a common misunderstanding about export control laws?

Which brings us to Elon Musk’s latest squabble with the government. This time it’s not about how he uses his rockets, but who is allowed to build them.


US rules designed to prevent the sale of weapons abroad apply to virtually all private space companies because rockets don’t differ that much from missiles (it’s mostly where you point it), and satellites have many military applications.

If a foreign person gains access to plans or hardware, that is deemed an export to their country of origin, so most space companies restrict access to their facilities to US citizens or permanent residents. At an international space conference in 2016, Musk was asked by an audience member why he doesn’t hire more foreign workers at SpaceX.

“This is not out of some desire of SpaceX to just hire people with green cards,” Musk said at the time. “It’s because we’re not allowed to do anything else. This is not a wise policy for the US, because there are so many talented people all around the world that we would love to have work at our company. But unless they can somehow get a green card, we’re legally prevented from hiring.”

That specific episode, however, is cited in a new civil lawsuit against SpaceX brought by the US Department of Justice, which argues that the company didn’t recognize that people in the United States who have received political asylum or refugee status can also work in an export-controlled environment. Attorneys in the DOJ’s Civil Rights division say the company discriminated against potential employees in these categories. (SpaceX and the DOJ didn’t respond to questions).


The government is correct in saying that asylees and refugees are treated the same as US citizens or permanent residents under export control laws, according to Joseph Gustavus, an export control attorney at the firm Miller Canfield. Both the International Trade in Arms Regulations and the Export Administration Regulations, the two relevant statutes, recognize these categories as “US persons.”

Still, the lawsuit surprised many aerospace executives who deal with export control rules because SpaceX’s hiring policy reflects the common rule of thumb in the industry. While these officials didn’t want to comment on the record about misunderstanding US laws, confusion over export controls rules is common. For example, an export control tutorial provided for small businesses that receive research funding from the government doesn’t mention the exception, though NASA’s 2021 Export Control Operations Manual does.


Still, the issue is not unheard of: Mikhail Kokorich, the Russian-born founder of US satellite start-up Momentus, was forced to resign from the company when the SEC charged him with fraud, arguing that he misled investors about his ability to work with export-controlled technology after his US asylum application was denied in 2019. Kokorich left the US and denies the allegations.

Now, the government is asking an administrative court judge to force SpaceX to change its hiring policy, reconsider and hire employees who were denied because they were in these categories, pay back wages for those who are found to have been discriminated against, and pay a civil penalty. It could prove to be an expensive result for SpaceX if the government prevails in court.


What’s not clear is why SpaceX is fighting the government over this set of policies. The DOJ’s investigation into this issue began in May 2020, according to the complaint, but SpaceX wouldn’t cooperate. Government attorneys spent the next year obtaining a subpoena, which forced SpaceX to produce hiring records in August 2021. The government’s investigation was completed in Nov. 2022, but it did not file its case until last week, some nine months later. The DOJ didn’t respond to questions about the suit, but settlement talks typically precede civil lawsuits.

Speaking generally, Gustavus said “this is not a hill you want to die on if you’re SpaceX,” but noted that without access to the specific details of the case, it’s impossible to know the company’s legal strategy.


It seems a stretch that SpaceX was intentionally discriminating against these specific categories of individuals because they are of foreign origin, given that Musk and other employees at the company are immigrants to the US. Tesla, Musk’s electric-car company, has a significant number of employees on work visas, and an executive seen as Musk’s top deputy there, Tom Zhu, was born in China and holds a New Zealand passport. Musk, however, is known for his stubborn approach to regulators, and may not want the government telling him how to hire.

Beyond SpaceX’s hiring practices, it’s clear there’s more for the US to do to maximize access to global talent. There’s still uncertainty over who can do what in the space industry; besides Kokorich, the US forced Ukrainian investor Max Polyakov out of his space firm Firefly last year over national security concerns. And beyond unclogging the immigration system generally, space entrepreneurs have proposed adding new visa categories linked to export control laws.


But this new lawsuit has revealed another strategy available to talent-hungry space firms: Start recruiting refugees and asylees.



Meanwhile, on the Moon, the Indian Space Research Organization’s Chandrayaan-3 mission continues apace, with the Vikram rover using a spectroscope to detect several elements, notably sulfur, on the lunar surface. The rover is hoping to find evidence of water ice as it prowls the area around the landing site. Below, an image of the rover as it departed the lander that safely set it down:

Image for article titled 🚀 Space Business: Unrestricted
Image: ISRO

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The Deep Space Network needs an upgrade. NASA operates a system of antennas scattered around the globe to communicate with robots far beyond Earth’s orbit; India’s space agency used it to stay in touch with Chandrayaan-3 Moon lander. But the network is hitting capacity just as a series of new missions are set to take flight, and its operators say that without new funding to expand this infrastructure, it may not be able to keep up.


Former Qualcomm CEO takes Globalstar’s top job. Paul Jacobs, who led the computing giant from 2005 to 2014, will now be CEO at Globalstar, the satellite firm most well known for plugging Apple’s iPhones into its space network. Jacobs, who is departing a telecom start-up, is expected to push Globalstar further into the business of supporting terrestrial communications.

ViaSat anomalies could threaten the space insurance industry. The satellite firm said in July that its ViaSat-3 spacecraft had a problem extending its antenna, and now this week that its Inmarsat-6 F2 satellite has a power problem. Insurance claims on the two vehicles could add up to as much as $770 million, a payout that could stress the specialized business of insuring space vehicles and lead to higher premiums across the industry.


Starlink 5000. SpaceX has now launched 5,005 Starlink communications satellites since 2019, which is more than the roughly 2,000 active satellites orbiting the Earth when the project began.

Otter Pup settles down. One of the most frustrating scenarios for a space company: You’ve gone to all the trouble to launch a satellite, but it is spinning out of control. You can’t see it, but you have to fix the situation, working with limited data, intermittent communications, and a handful of tools. It happened to Starfish Space, but after more than two months of work, they’ve stabilized their Otter Pup spacecraft with a novel use of magnets, and are working to resume their mission to demonstrate proximity and docking operations.


Last issue: Why does the US government need Elon Musk and SpaceX so badly?

Last year: Is iPhone satellite connectivity worth Apple’s investment?

This was issue 193 of our newsletter. Hope your week is out of this world! Please send me export control horror stories, tips, and informed opinions to tim@qz.com.


This article has been updated to clarify Mikhail Kokorich’s departure from Momentus.