SpaceX is the new East India Company

When SpaceX sells some of its shares and goes public on the Nasdaq later this week, it will be the largest initial public offering (IPO) in history: the company is expected to be valued at about $1,75 trillion. Investors are being asked to value a company that builds rockets, operates the world’s dominant satellite internet network, and is increasingly playing a key role in military communications for the United States and its allies. These successful businesses must be seen alongside its AI development project, a hugely expensive undertaking that Elon Musk has incorporated into the same corporate structure.

SpaceX’s prospectus presents an ambitious and unique story: a technology and high-growth champion that can stand shoulder to shoulder with the world’s largest and most powerful companies. History, however, suggests a different, less comforting path, because the company SpaceX most closely resembles is not Apple or Nvidia, but the East India Company, which has existed for almost 300 years.

Of course, SpaceX is not on a path to taxing or ruling over the population, as the privileged corporations of the early modern era did. Space is uninhabited (at least as far as we know). Yet here we have a company operating beyond the reach of any sovereign state and that has already acquired vast powers that governments are now, belatedly, trying to reclaim.

Between about 1570 and 1860, European states ruled over unregulated oceans and overseas territories through privileged joint-stock companies - the most significant of which were the British, Dutch and French East India Companies.

These privileged trading companies were hybrid creations: commercial enterprises that also served as instruments of the state. They built monopolies and used the absence of law to set their own rules and perform the functions of sovereign power - from minting money and maintaining legal order among local populations to waging wars and concluding treaties. Edmund Burke called the East India Company "a state disguised as a merchant," and it is precisely this configuration that is being reestablished in Earth's orbit today.

Consider, first, the issue of monopoly. By landing and reusing its boosters, SpaceX has solved the chicken-or-egg dilemma. Since reusability is only profitable with a very high launch frequency, the company has built Starlink, a constellation of thousands of satellites whose growth and maintenance ensures a steady launch rhythm. Competitors that do not have both the rockets and the guaranteed demand for satellite connectivity have a hard time breaking into that market.

As we show in a new paper, SpaceX’s share of the total global mass of cargo launched into orbit has grown from less than 10% in 2014 to nearly 80% today, or 94% in the United States, where NASA is among its largest customers. In the process, SpaceX has seized a limited number of orbital slots and radio-frequency spectrum, further raising the barriers to future market entrants. This is not an oligopoly as we know it from textbooks on technology markets. It is more reminiscent of something much older.

There is also a legal vacuum. The 1967 Outer Space Treaty was written for a world in which governments had a monopoly on activities in space. It states that “outer space is not subject to national appropriation, whether by declaration of sovereignty, use or occupation, or by any other means,” and defines it as “the common good of all mankind.” However, the treaty does not provide any mechanism for enforcing these principles.

It was into this vast legal vacuum that the United States introduced the Commercial Space Launch Competitiveness Act in 2015 and the Artemis Accords in 2020, which establish that resource exploitation does not constitute “appropriation.” This is exactly the change that SpaceX needed. Similarly, three centuries ago, a company’s charter was both a license to trade and a unilateral right presented as law. In both cases, the pioneers wrote the rules according to their own interests.

There is another parallel: the blurring of the line between sovereign and private. Recall that in 2022, Musk refused to activate Starlink over Crimea to enable a Ukrainian attack on the Russian fleet. A private individual effectively vetoed a sovereign state’s decision, and even the U.S. government could not easily overturn that decision. As activities expand to the Moon, SpaceX will be in a position to exert significant influence in setting standards, managing resource requirements, and overseeing the “safety zones” that the Artemis Accords allow states to declare. Thus, a private company could provide answers to questions that are inherently sovereign.

Just as Britain granted a charter to the East India Company to prevent the Dutch from monopolizing the spice trade, the United States is granting rights to SpaceX, hoping to overtake China in the race for strategic dominance in space. But the more indispensable the company becomes, the less real power the state will have over it. That fragility was clearly demonstrated last year, when President Donald Trump and Elon Musk publicly clashed. Trump threatened to cancel government contracts with SpaceX, while Musk threatened to deny the US government access to the International Space Station. A formally sovereign power finds itself dependent on an actor it can only win over, not command.

The lesson of the age of the privileged trading companies is that such power, once established, is extremely difficult to bring back under control. Britain did not seriously constrain the East India Company until 1858, after famine, fiscal crisis, and a violent rebellion (what the British call the "Great Mutiny" and the Indians the "First War of Independence"), when further inaction became impossible. But by then the price of such a move had already been disastrously high.

The same history, however, also suggests what governments should do today, before it is too late. The goal of re-establishing control is not to destroy a single, highly successful actor, but to reduce the state’s dependence on it. In this respect, the continental rivals of the East India Company provide a better model. The Portuguese and French crowns held equity stakes in their privileged companies, which guaranteed them a degree of strategic control from within. A government-appointed board seat in companies with near-sovereign powers, or a minority stake like the one the United States recently acquired in Intel, would ensure oversight of security zones, resource rights, and key infrastructure, without stifling the private incentives that made the sector dynamic.

The window for establishing even partial control over the behavior of the new technological “sovereigns” is rapidly closing. The key question for authorities is whether knowing what the East India Company eventually became is enough to keep its 21st-century successor from following the same path. SpaceX’s initial public offering is a good time to ask that question.

A. Terzi is Assistant Professor at the Bennett School of Public Policy at the University of Cambridge and Associate Professor of Economics at Sciences Po;

S. Marcuzzi is an assistant professor of the history of international relations at the Center for Advanced Defense Studies (CASD)

Copyright: Project Syndicate, 2026. (translation: NR)