NASA Changes Course on Commercial Space Stations

On March 24, 2026, NASA unveiled a strategy, called Ignition, to sustain U.S. leadership in space exploration and science. The strategy outlines a new plan to maintain a human presence in low Earth orbit (LEO), making changes to NASA’s Commercial LEO Destinations (CLD) program. These changes are the latest chapter in a saga that began in 2019, when NASA rolled out its strategy for commercial LEO development, describing plans to transition to commercially operated space stations after the retirement of the International Space Station (ISS). But NASA now says the business case for companies building commercial space stations does not make sense and that these companies cannot deliver an operational capability anytime soon.

But the business model is not to blame. The main issue is that NASA and Congress have not allocated sufficient funding, over many years, to successfully execute NASA’s commercial LEO development strategy—a problem compounded by a lack of consistency with CLD requirements. The funding and requirements issues trace back to the inadequacy of the answer to one question: Why does the United States need another space station? The answer to this question is simple, but it requires a dogmatic belief that, at some point in the future, humans will live elsewhere in the solar system and beyond. If NASA too believes in this vision, it should provide consistent direction and funding and not give up on the companies that have been developing a commercial foundation for LEO—with the help of significant private investment—over the last several years.

NASA’s Shifting Vision for Commercial LEO

NASA’s 2019 commercial LEO development strategy, among other things, called for commercially operated modules attached to the ISS and free-flying space stations. A 2021 update to the plan outlined the CLD program, which again called for free-flying stations, an architecture also reinforced in an August 2025 NASA directive laying out the program’s next phase. The Ignition announcement changes direction: NASA now says it wants to build a core module that would be owned and operated by NASA and initially attached to the ISS, which NASA is planning to decommission in 2030. NASA is asking companies to build and dock commercial modules to the core module. Eventually, this core module and the attached commercial ones would detach from the ISS and become a free-flying space station. Today, several U.S. companies are working to build free-flying commercial space stations—but none of them have been building exactly what NASA now wants. The new changes proposed by NASA throw a wrench in the gears of what these companies have been doing for years.

NASA Is the Market

NASA argues that the changes to CLD are needed for two main reasons. For one, NASA says that the market does not support the business cases of the companies developing commercial space stations. This is a curious argument, as the market for commercial space stations is mainly what NASA is willing to spend on them. In the 1920s, the U.S. government was the primary customer for commercial air transportation-as-a-service and contracted with private airlines to deliver mail, helping airlines close their business cases before the maturation of a strong nongovernment market for commercial aviation. At the dawn of commercial aviation, private airlines could not turn a profit without the government as the main customer. The fact that NASA would be the core customer for commercial space stations need not jeopardize the viability or wisdom of the as-a-service model. NASA is the anchor customer for transportation services to and from the Moon, yet it is moving forward, and even doubling down, on the Commercial Lunar Payload Services program. It also wants to buy transportation services on the lunar surface using an as-a-service model. NASA is also discussing as-a-service communications for Mars.

Would anyone argue that NASA is not the main customer for any of these services, as well as the long-running, successful Commercial Crew Program? The “market” problem for commercial stations is that NASA has not wanted to spend, and Congress has not wanted to appropriate, enough money for the program. Without NASA money, there is no real market—and this should not be a surprise. NASA noted back in 2021 that only one day in the future would NASA be “one of many customers in LEO.” One issue is that the companies building commercial space stations have somewhat obscured this fact, speaking of the market in a way that avoids emphasizing that NASA is the main buyer today and that, without NASA as a customer, the business case does not close.

To date, less than $600 million has gone to industry (in 2020 and 2021) from NASA to support commercial space station developments. In comparison, it cost over $150 billion, with over two-thirds of that cost paid for directly by NASA and the rest by international partners, to build the ISS. As the NASA Office of Inspector General noted, “future low Earth orbit platforms will likely not be viable without continued significant Government support.” In 2024 congressional testimony, an industry representative noted that NASA was only covering 5 percent of her company’s costs to develop a commercial space station, whereas NASA had covered between 80 and 90 percent of the costs for developing commercial crew vehicles. Private investors have invested over $3 billion in companies developing stations, meaning every $1 invested by NASA has been complemented by $5 in private investment—a force multiplier for NASA.

The Historical Case for Publicly Seeded Space Markets

The as-a-service model is still a good one and one that NASA should not abandon. NASA cannot create a nongovernment market, but through as-a-service models, it can help build the foundation that underpins one in the future—an approach with parallels in history. In 1860, Congress passed a law that provided funds to support the construction of a transcontinental telegraph line and a series of repair stations that were owned and operated by the private sector. The law gave the government priority rights to use the network, but it gave operators the right to sell telegraph services to nongovernment customers. In the late 1890s, before anyone realized the commercial potential of the radio, the British navy became one of the earliest customers for Guglielmo Marconi’s wireless technology, laying the groundwork for a global network of coastal radio stations and shipborne radios, which Marconi leased to customers using an as-a-service model. If CLD received the funding proposed by House appropriators in charge of NASA—$400 million for FY 2027—industry representatives have publicly affirmed that would be sufficient to support two as-a-service space stations with the government as the core customer, avoiding vendor lock in and creating competition for NASA’s business. Such an approach could create opportunities for commercial space stations to capitalize on new non-government business in LEO.

NASA’s Revised Plan Faces the Same Technical Challenges

The second reason NASA provided for the shift in CLD plans is that the companies aiming to operate commercial space stations are simply not technically ready to take on such a task in the foreseeable future. If this is true, how would the new plan address this issue? NASA is still turning to industry as part of its revised plan and will, no doubt, ask industry to build its core module, which will include power, environmental control, life-support subsystems, and other infrastructure functions needed for a free-flying station. Whatever technical and operational challenges companies building commercial space stations face today will be the same ones that any prospective developer and builder of a core module will face in the coming years. If NASA intends to help a core module developer address its technical and operational challenges, it makes sense for NASAto help companies like Axiom, Blue Origin, Vast, and Voyager address any identified technical challenges today.

Today, around seven years after the introduction of NASA’s first plan to replace the ISS with commercial space stations, there is only so much that can be done to minimize the gap between ISS retirement and a successor capability. Is a new plan the right answer to close that gap sooner and potentially save NASA money over the long term? Switching contractors in the middle of a home renovation is not typically the best plan to save time and money. Companies are already well into building hardware on the path to flight test iterative approaches to operating free-flying commercial space stations. Rather than change the plan, NASA could provide those companies a path to obtain a long-term contract or some other mechanism to obtain NASA funds as a way to close their business cases and move their efforts forward. Ideally, NASA could allocate enough funding to buy services from two providers, but should it only have enough funding for one, starting with a sufficiently funded services contract for a single vendor is a viable path. To craft such a contract, NASA needs to decide what exactly it wants and stop revising or drastically changing its requirements.

Human Expansion Beyond Earth Starts in LEO

This goes back to the heart of the issue and possibly the underlying disease that has afflicted CLD from the start: What is the reason NASA wants to maintain a space station? Back in 2018, NASA first issued a white paper to forecast its demand for human spaceflight in LEO. NASA most recently attempted to answer that question with its microgravity strategy, released in late 2024. But many of the 13 goals and 44 objectives identified in the strategy can be accomplished with automation and robots, without the need for humans. Boiled down to the simplest explanation, perhaps the reason to have a space station with people in LEO is that it is a critical step on the road to a future in which humans are living elsewhere in the solar system and beyond. A critical element of any architecture to reach that goal is the maintenance of a permanent human presence in LEO that would be used to work out the technical details and operational procedures to enable humans living much farther afield. The ISS has served its purpose for 25 years, but if one accepts this dogmatic vision, another station must take its place. Human expansion beyond Earth starts in LEO. NASA should clearly make this argument.

The Best Path Forward for CLD

If CLD were a play, it would be a Greek tragedy—but hopefully a comedic tragedy, as they usually have happy endings. But it is a tragedy nonetheless for several reasons. NASA blames the companies that have been trying to interpret and follow its demand signals, using private capital alongside NASA money, for their inability to deliver on the vision of commercial LEO development. But the fundamental issue is endemically insufficient funding—for which both NASA and Congress should share the blame—and changing requirements. At this stage, no new plan can fully right the ship and make sure there is no interruption to the United States’ continuous human presence in space after the ISS retirement. But a drastic change in plans only adds new delays and new costs. News of another leak on the ISS may call into question whether it is safe to extend the station past 2030, giving little time to design, build, launch, and operate a new core module attached to the ISS.

Sticking to the CLD plan—with more NASA funding to close the business case for commercial space station providers and NASA support to address any technical concerns—is the best way to minimize the gap between ISS retirement and the operationalization of a new space station. NASA should not give up on the as-a-service model. There are few nongovernment customers today for commercial space stations—NASA is nearly the whole market. But when NASA buys things as a service, it creates opportunities for companies that may one day, like SpaceX, end up playing important roles in the space economy. As NASA decides its next steps based on inputs to its space station request for information and Congress debates FY 2027 funding priorities for NASA, NASA should reconsider staying the course on CLD—preferably with more funding. With this approach, NASA gives the seeds of the U.S.-led space economy, which will stretch from LEO to the Moon and beyond, the greatest chance to take root and grow.

Clayton Swope is the deputy director of the Aerospace Security Project and a senior fellow in the Defense and Security Department at the Center for Strategic and International Studies in Washington, D.C.