Stoke Space announced a massive capital raise on Wednesday that might seem, at first glance, like just another bet on the commercial launch market. The details tell a different story.

Led by billionaire Thomas Tull’s U.S. Innovative Technology (USIT), a fund that explicitly invests in technologies tied to national security, the $510 million Series D round underscores a larger shift in the launch industry. The old assumption was the winners of launch would be the companies that capture the lion’s share of commercial payloads.

While there is still demand on the commercial side from private constellation developers and for emerging use cases like in-space manufacturing or lunar payloads, the center of gravity has shifted decisively toward defense.

Just a few years ago, space startups were selling investors on visions of a rapidly expanding commercial market for weather monitoring, broadband, and remote-sensing satellites. Astra, for example, told investors in its 2021 SPAC deck that it would eventually launch hundreds of rockets per year to serve a growing small satellite market. Relativity Space pitched investors on a 3D printing revolution that would make rockets cheap enough to unlock large commercial demand.

But there are only so many commercial payloads to fly, and only one company — SpaceX — has managed to consistently launch them cheaply and reliably.

Defense, meanwhile, is on an opposite trajectory.

Geopolitical shifts, like Russia’s war against Ukraine and growing competition in space from China, have created new tailwinds. The Pentagon’s new “Golden Dome” initiative, a multibillion-dollar project aimed at creating a layered missile defense shield over the continental United States, has flooded the aerospace ecosystem with lucrative new opportunities.

Meanwhile, programs like the Space Force’s National Security Space Launch (NSSL) and the Space Development Agency’s missile-defense satellite constellation are promising years of predicable, high-value contracts.

Launch startups have noticed. Their language, investors, and business models have realigned toward a single buyer: the U.S. government.

In a press release, Stoke Space nods toward this reality, saying the new funding would strengthen “capability across the U.S. space industrial base.” Support from other new investors, like Washington Harbour Partners LP and General Innovation Capital Partners, further underscores “Stoke’s importance to national security and the U.S. industrial base,” the company said.

Stoke’s recent wins highlight this reality. In March, it was one of a handful of launch providers selected for the NSSL Phase 3 Lane 1 program, which lets the company compete for up to $5.6 billion in launch contracts over the next decade.

Other recent deals tell a similar story. Firefly’s recent $855 million acquisition of SciTec was framed by CEO Jason Kim as a move that enhanced the company’s “ability to support a growing number of defense missions.” Relativity’s new owner, former Google CEO Eric Schmidt, just recently warned lawmakers that if China achieves superintelligence first, “it changes the balance of power globally in ways that we have no way of understanding, predicting or dealing with.”

While his remarks weren’t about launch specifically, they sum up the broader sentiment across the space industry: America cannot lose in strategic domains like space and AI.

In that context, USIT makes an obvious lead for the new round. Thomas Tull launched the fund in 2023 to fund technologies “relevant to the national interest.”

Past investments are wide-ranging but related to national resilience, including defense startup Shield AI and Gecko Robotics. Stoke’s inclusion in that portfolio cements the new reality that space investment is squarely at the intersection of venture capital and defense budgets.