For decades, space was treated as a niche domain, scientific and strategically important, but economically peripheral. That regime is over. As we see falling launch costs, new industrial capabilities, AI-driven demand for compute, and breakthroughs in microgravity manufacturing, we observe the real-time transformation in the realm of space tech. Firms that understand this shift early, such as Lux, Atlas, and a handful of others, are going to define the next 50 years of industrial and scientific progress. This piece outlines the emerging logic of space as a critical technology domain, the companies building it, and the gaps and governance challenges that must be addressed.

1. Space as a Technology Platform

Lux Capital’s aerospace portfolio [1] captures companies spanning the entire emerging space tech and representing the broader shift:

  • Launch & Manufacturing: Relativity, Hadrian
  • In-space logistics & mobility: Impulse Space
  • In-orbit manufacturing: Varda Space Industries
  • Earth observation & sensing: Planet
  • Communications & antennas: Kymeta
  • Aerospace software & autonomy: Covariant, Cape
  • Aviation & propulsion: Whisper Aero, Aurora
  • Urban simulation & design: Higharc
  • Airspace management: Airmap
  • Space robotics & reflectivity: Reflect
  • Industrial automation: Amca

Space is becoming a full-stack industrial domain, with its own supply chain, compute layer, manufacturing layer, and logistics layer. Lux is betting on the entire ecosystem, not just rockets.

2. Microgravity as a New Industrial Environment

Microgravity changes the physics of manufacturing as it enables no sedimentation, convection, buoyancy-driven mixing, or gravitational stress on growing structures, letting us form larger and more uniform protein crystals, improved 3D tissue cultures, novel solid forms of small molecules, and new materials with properties impossible on Earth.

Atlas [2] highlights two early proof points that served as early industrial demonstrations.

  • Merck produced more homogeneous, lower-viscosity Keytruda crystals on the ISS, potentially enabling subcutaneous delivery for a drug currently requiring IV infusion.
  • Varda Space Industries created a unique ritonavir crystal in orbit and returned it intact, raising $90M to scale in-space manufacturing.

The old economics of space were prohibitive, such as costing ~$400,000/kg to LEO in the 1980s, to now just about ~$1,500/kg, which captures a reduction of more than 250-fold.

Meanwhile, the value density of biologics is enormous, with many biologics valuing more than $1M/kg, and Keytruda approximately ~$47M/kg.

As the product is worth millions per kilogram, launch costs get less important, microgravity advantages matter more, as in-orbit manufacturing becomes economically feasible.

This is why Varda is pursuing a CDMO model, contract development and manufacturing for high-value molecules, rather than a CRO model. CROs are limited by slow experiment cadence in space; CDMOs capture more value and operate at production scale.

3. Space-Based Compute

Google’s recent paper [3], Towards a Future Space-Based, Highly Scalable AI Infrastructure System Design, underlines this. AI compute demand is immensely growing, and data centers face land, cooling, and energy constraints. In space, we have access to unlimited solar energy, which provides passive cooling, a crucial benefit, as well as physical separation for safety-critical AI systems.

4. The Missing Layer of Governance

The EA/Cambridge space governance work (Carson Ezell et al.) highlights the risks of orbital debris, AI-enabled autonomous systems in orbit, lack of global coordination, and space-based biomanufacturing oversight.

The governance gap is widening faster than the technology frontier. As space becomes industrialized, the risks include collisions that could cripple global communications, unregulated in-orbit manufacturing could create biosecurity concerns, and space-based AI computing that could circumvent terrestrial safety regimes. Hence, space governance is a prerequisite for industrialization.

5. Constraints, Gaps, and Opportunities

Even with falling launch costs and early proof points, several constraints remain:

  • Sterility and thermal control in orbit
  • Recovery logistics (Varda’s reentry capsule is a major innovation here)
  • Regulation and international treaties
  • Scale limitations (milligrams → grams today; kilograms → tons tomorrow)
  • Adoption friction (pharma is slow to adopt new manufacturing modalities)

Beyond Lux and Atlas, several firms are building deep exposure to space and aerospace:

  • Founders Fund – Varda, Endurosat, Impulse Space
  • DCVC – Akash Systems, Capella Space, Impulse Space, Rocket Lab
  • Prime Movers Lab – E-Space, Axiom Space, Quantum Space, Venus Aerospace, Overview, Momentus
  • Khosla Ventures – Rocket Lab, Skybox Imaging, Varda
  • Andreessen Horowitz (a16z) – ASI, Apex, Northwood
  • Bessemer – Impossible Aerospace, Auterion

All alongside Sequoia and Space Capital. There are also corporate & strategic investors such as Lockheed Martin Ventures, Boeing HorizonX, Northrop Grumman Ventures, Airbus Ventures, and Raytheon Technologies Ventures, and independent as well as Government-aligned agencies such as UK Space Agency, JAXA partnerships, and ESA incubators. All these uphold how the investor landscape is maturing significantly.

Conclusion

As space is becoming a general-purpose technology, like electricity or the internet, it touches computing, biology, materials, climate, and communications. The next decade will see in-orbit manufacturing of biologics, materials, and semiconductors, space-based computing for AI and climate modeling, autonomous systems operating across domains, and global sensing networks with continuous Earth observation.

References

  1. Companies - Lux Capital - Science and Tech Venture Capital
  2. Boosters and Biologics: Is Space-Based Biomanufacturing Real? - LifeSciVC
  3. Exploring a space-based, scalable AI infrastructure system design

Last updated: January 2026