If launch costs have fallen to a fraction of their level 20 years ago, why has the global space economy not grown at the same pace?
Over the past decade, reusable rockets have reduced the cost of reaching orbit by an order of magnitude, while the number of satellites launched has increased severalfold. Yet the global space economy continues to grow by only single digits each year. Space Foundation estimated its value at approximately $613 billion in 2024, while Novaspace put the 2025 figure at around $626 billion—only a modest increase over two years.
An even more revealing comparison is that the overwhelming majority of the thousands of new satellites placed in orbit belong to a single operator. What is often described as “industry expansion” currently looks more like the growth of one company than broad-based expansion across the entire sector.
Mature Satellite Services Still Generate Most Revenue, but Growth Is Slowing
SpaceX’s rockets and Starlink attract enormous attention, but launch services are not the largest item on the space economy’s balance sheet.
Space Foundation estimated the global space economy at approximately $613 billion in 2024, while Novaspace valued it at around $626 billion in 2025 and projected that it could approach $1.8 trillion by 2035. Commercial revenue already accounts for roughly 80% of the total. In other words, the space economy is no longer a niche sector sustained primarily by government budgets.
Within that commercial share, however, satellite services and ground equipment remain the largest revenue generators. According to the Satellite Industry Association’s 2025 State of the Satellite Industry Report, global commercial satellite industry revenue included approximately $165.2 billion from ground equipment and $105 billion from satellite services. Together, these segments accounted for nearly 90% of the commercial satellite industry. Satellite manufacturing and launch services are growing rapidly, but their combined revenue remains only slightly above $30 billion.
Mature satellite services still account for the largest share of space economy revenue, but their growth has slowed significantly. Industry expansion is shifting from traditional services toward new infrastructure.
A structural transformation is underway. Traditional satellite broadcasting and fixed satellite communications are maturing and expanding more slowly, while satellite broadband and Earth observation data services are growing rapidly. The space economy is going through a revenue transition: established services continue to generate cash flow, but most incremental growth is coming from new infrastructure.
For China, satellite internet projects—including Guowang and the Qianfan/G60 constellation—as well as commercial Earth observation systems such as Jilin-1, are positioned within this new infrastructure growth channel. Their growth over the next several years will depend on their ability to serve markets where terrestrial networks cannot provide adequate coverage and where demand for real-time data is increasing.
LEO Constellations and Reusable Rockets Have Rewritten the Cost Curve, but the Financial Equation Remains Unsolved
By 2026, low Earth orbit broadband constellations had entered commercial operation. Starlink had approximately 9,600 satellites in orbit, more than 10 million paying subscribers and around $11.4 billion in connectivity revenue in 2025. According to data disclosed in SpaceX’s S-1 filing, the business had already achieved operating profitability in 2024. It represents a rare example in commercial spaceflight of both substantial revenue and genuine profit.
Starlink, however, remains an exception. Amazon’s Project Kuiper plans to deploy 3,236 satellites but had launched only more than 375 by mid-2026. OneWeb completed its first-generation constellation of 648 satellites, while its second generation remains in the planning stage. Telesat Lightspeed is targeting 298 satellites and primarily serves enterprise and government customers. All remain in the investment phase and are still some distance from profitability.
Rockets are what have fundamentally changed the industry’s cost structure. According to SpaceX’s S-1 filing, conventional rockets cost approximately $18,500 per kilogram to orbit, compared with around $2,700 per kilogram for Falcon 9 and $1,400 per kilogram for Falcon Heavy. If Starship achieves full reusability, its target is to reduce that cost to below $100 per kilogram.
Together, reusable rockets and LEO megaconstellations have dramatically lowered the cost of accessing space, but the financial sustainability of these constellations remains the industry’s biggest unanswered question.
Lower costs will enable many new applications, but low cost alone does not create a viable business. Satellite manufacturing, launches, operations, spectrum, customer acquisition and ground terminals all require substantial capital investment. Starlink has reached profitability because it controls its rockets, satellite manufacturing and terminal supply chain, creating a vertically integrated model that competitors will find difficult to replicate.
For later entrants, simply copying the strategy of launching large numbers of satellites—without controlling costs or securing high-margin customers—may amount to little more than exchanging capital for scale.
For China, the key questions are whether reusable rockets and mass satellite production can reduce total system costs far enough, and whether operators can secure high-ARPU markets such as maritime connectivity, aviation, private enterprise networks and broadband for remote regions instead of competing directly with low-cost terrestrial broadband.
AI and Space-Based Computing: Turning Satellites From Data Collectors Into Computing Nodes
The biggest change in commercial Earth observation over the past decade has not been higher resolution. It has been the growing importance of how quickly users can understand an image.
Satellites generate enormous volumes of data every day. Under the traditional model, however, limitations in space-to-ground transmission bandwidth and ground station coverage mean that less than 10% of useful data can be returned to Earth, with large amounts discarded in orbit.
In May 2025, Zhejiang Lab, ADA Space and their partners launched the first 12 computing satellites for the Three-Body Computing Constellation. Each satellite can provide up to 744 TOPS of computing power, while inter-satellite laser links support transmission rates of up to 100 Gbps. Once interconnected across the orbital plane, the satellites provide a combined in-orbit computing capacity of 5 POPS.
The objective is to move computing power into space, enabling data processing and AI inference directly in orbit.
This marks a transition from collecting data in space and processing it on Earth to both sensing and computing in space. AI models deployed directly onboard satellites can perform Earth observation analysis, object recognition and change detection before transmitting the results to the ground. For time-sensitive applications such as crop-yield estimation, disaster response, environmental monitoring and urban management, this can significantly shorten the interval between capturing an image and understanding what it shows.
AI is shifting the core value of the space economy from placing hardware in orbit toward generating data intelligence and delivering onboard autonomy. Space-based computing is a critical variable in this transformation.
SpaceX, Google, Amazon and NVIDIA are also developing space-computing capabilities. China’s outline for its 15th Five-Year Plan calls for an integrated air-space-ground service system combining communications, navigation, remote sensing and computing. China’s Ministry of Industry and Information Technology and the China National Space Administration are also advancing research related to space-based computing.
The field remains at an early stage, but it resembles the LEO constellation sector five years ago: once the infrastructure is in place, the marginal cost of developing applications on top of it can fall rapidly.
For industry participants, the opportunity lies not only in launching computing constellations, but also in determining who will define the standard use cases for onboard data processing and AI applications.
Orbital Congestion and Space Asset Security: From Externalities to Commercial Variables
As more LEO constellations are deployed, the orbital environment is becoming increasingly congested. By 2026, more than 36,500 trackable objects were in orbit, most of them debris or retired spacecraft. Euroconsult forecasts that approximately 17,000 additional satellites will be launched by 2030, with Starlink, OneWeb, Project Kuiper, Telesat Lightspeed and Chinese constellations accounting for a substantial share.
Orbital congestion was once treated as an externality: individual operators contributed to the problem, while the entire industry shared the consequences. It is now beginning to affect the finances of individual operators.
The US Federal Communications Commission requires LEO satellites to leave orbit within five years after completing their missions. The European Space Agency’s ClearSpace-1 mission is scheduled to conduct an active debris-removal operation in 2026. Insurance providers have also begun incorporating collision risk into their pricing.
In-space servicing, assembly and manufacturing, or ISAM—including life extension, refueling, repair, in-orbit assembly and debris removal—is therefore moving from concept to commercial deployment. Multiple estimates place the in-space servicing market at between $4.3 billion and $7 billion by 2030. Satellite life-extension services alone were valued at approximately $4 billion in 2026 and could approach $7 billion by 2030.
The scale advantages of megaconstellations are turning orbital congestion and space asset security from industry externalities into core variables affecting operators’ financial returns.
This creates opportunities in two areas. The first is space security infrastructure, including space situational awareness, collision warnings and in-orbit servicing. The second is a new generation of satellite manufacturing standards that incorporate retirement, deorbiting and serviceability from the design stage.
In the future, the ability to operate compliantly in orbit may become more important than the ability to launch.
Lunar Exploration, Commercial Space Stations and Space Manufacturing: Real Businesses or Public Programs?
The final group includes some of the most frequently overvalued segments of the space economy: commercial space stations, lunar exploration and space manufacturing.
Vast’s Haven-1 is scheduled for launch in 2026 and has been described as the world’s first commercial space station. NASA has committed approximately $3.6 billion to support its Commercial Low Earth Orbit Destinations program, with the goal of maintaining a continuous US presence in LEO after the International Space Station is retired.
Even with this support, however, the principal customers for commercial space stations remain government space agencies, research institutions and astronaut programs operated by a small number of countries. Genuine commercial revenue from activities such as manufacturing and tourism remains extremely limited.
The situation is even clearer in lunar exploration. NASA’s Artemis program and the Chinese Lunar Exploration Program are both advancing missions involving the lunar south pole, sample return and lunar communications and navigation infrastructure. These missions, however, continue to rely primarily on public funding. Commercial companies generally participate as contractors or equipment suppliers.
Before lunar resource development and a genuine lunar economy can become commercially viable, the industry must resolve multiple challenges involving cost, energy, in-situ resource utilization and legal frameworks.
Space manufacturing faces the same limitations. China has completed demonstrations involving in-orbit metal 3D printing and the exposure of simulated lunar-soil bricks to the space environment, showing that the underlying technologies are feasible. Large-scale commercial production, however, remains a distant prospect.
Lunar exploration, space manufacturing and commercial space stations remain in a phase dominated by public investment, with commercial participation playing a supporting role. Their strategic significance must be distinguished from their potential financial returns.
Key Takeaways
- The space economy is undergoing a structural revenue transition. Mature satellite services remain its primary source of income, but most incremental growth is coming from new infrastructure such as LEO constellations, AI-powered data products and space security.
- Lower costs do not automatically produce profits. Reusable rockets and mass satellite production have expanded what is technically possible, but only companies that control their supply chains and secure high-margin customers can convert scale into profit.
- National strategic requirements must be distinguished from closed-loop commercial business models. Lunar exploration, space manufacturing and commercial space stations will retain a strong public-sector character in the near term. Satellite internet, commercial Earth observation, space-based computing and in-orbit servicing are closer to becoming scalable commercial services.
Turning space technology into a sustainable business requires more than launch access—it demands the right data, engineering capabilities and path to commercialization. Whether you are developing a satellite constellation, an AI-powered Earth observation application or a new in-orbit service, connect with STARPATH’s Forward Deployed Engineers to evaluate technical feasibility, define the right architecture and move your project from concept to deployment.
Principal sources: Space Foundation’s The Space Report 2025 Q2; Novaspace; Morgan Stanley; the Satellite Industry Association’s State of the Satellite Industry Report 2025; SpaceX’s S-1 filing with the US Securities and Exchange Commission, 2026; the International Telecommunication Union’s Facts and Figures 2025; Zhejiang Lab; Science and Technology Daily; China Youth Daily; the European Space Agency; Euroconsult; Northern Sky Research; NASA; Xinhua News Agency; Economic Information Daily; China News Service; China Space News; and Global Times.
Methodology note: The projection of a $1.8 trillion global space economy by 2035 represents a consensus estimate from industry research organizations.
