NASA's Risky Bet on Commercial Space Stations Before ISS Shutdown

Why It Matters

The International Space Station (ISS), which has maintained continuous human presence in low-Earth orbit (LEO) for over 25 years, is approaching the end of its operational life according to a report form the U.S. Government Accountability Office (GAO). NASA plans to deorbit the aging facility by the early 2030s, but the agency has not yet secured a viable replacement. The transition from the ISS to commercial space stations represents one of the most consequential shifts in American space policy in decades, with stakes that extend far beyond orbital mechanics.

The main issue is whether the United States can maintain uninterrupted human spaceflight capabilities while transitioning to a new commercial space economy, or whether a gap in continuous presence could cede American leadership in low-Earth orbit to competitors like China. The timeline is tight as companies have roughly four years to design, build, certify, and launch operational stations before the ISS is scheduled for de-orbit. NASA officials have acknowledged that its current budget may only fund one commercial station instead of the two or more originally planned. Meanwhile, the agency is still deciding between competing architectural approaches, and Phase 2 funding announcements have already slipped.

A gap in continuous U.S. presence in low-Earth orbit could result in loss of LEO-based science and technology research, threaten the viability of the emerging commercial space economy, and compromise U.S. leadership in space at a moment when China has already achieved its own continuous orbital presence.

The Big Picture

The International Space Station is nearing 30 years old. It has been operating well over the 15 years for which NASA and its international partners designed and tested it. NASA spends approximately 3 billion dollars per year to maintain and operate the ISS, with crew and cargo transportation costs representing approximately 60% of that annual operating budget. NASA officials indicated ISS operating costs will likely grow in subsequent years.

Structural concerns are mounting. NASA and Roscosmos have been monitoring cracks in the transfer tunnel in the Russian segment of the ISS. These cracks in the ISS Russian segment transfer tunnel resulted in air leaks. As of February 2026, air leaks from cracks in the ISS Russian segment transfer tunnel had been mitigated with a temporary sealant. However, the underlying structural issues in the ISS Russian segment transfer tunnel remain despite sealant mitigation.

Despite these challenges, NASA's latest structural health analyses indicated a high level of confidence that the ISS can operate through 2028. NASA officials said they are confident the ISS's life can be extended through the late 2030s if needed. But the agency has already committed to a deorbit timeline: in early to mid-2028, the ISS is planned to begin being lowered via atmospheric drag and re-entry maneuvers. In mid-2029, NASA plans to launch the U.S. Deorbit Vehicle, a SpaceX Dragon spacecraft with docking and rendezvous capabilities. At the end of 2030 or early 2031, the U.S. Deorbit Vehicle is planned to perform a re-entry burn, pushing the ISS through the atmosphere and into the ocean.

The critical juncture arrives in 2027, when NASA will assess whether to launch the deorbit vehicle in 2029 or extend ISS operations. This 2027 NASA assessment is the critical transition decision point.

Racing for Commercial Replacements

NASA is working with six U.S. companies to develop and certify commercial space stations. The agency is using a two-phased approach for commercial space station development. Phase one started in 2020 and is ongoing, focused on maturing station designs to preliminary design review level. Phase two has not yet been finalized and will award one or more Space Act Agreements to continue design and development, including an in-space crewed demonstration.

NASA had planned to release the final Phase two announcement for proposals in October 2025 and award agreements in April 2026. NASA's Phase two announcement timeline was delayed by the 2025 federal government shutdown and the confirmation of a new NASA Administrator. In September 2025, NASA released a draft announcement for Phase two proposals.

Three companies have received substantial funded agreements. Axiom Space was awarded a firm-fixed price Indefinite-Delivery, Indefinite-Quantity (IDIQ) contract of 140 million dollars in February 2020 to develop a commercial space station that attaches a module to the ISS and eventually detaches to become a free-flying station. Blue Origin was awarded a funded Space Act Agreement of 172 million dollars in December 2021 to develop the Orbital Reef commercial space station concept, described as an evolvable architecture mixed-use business park. Starlab Space (formerly Nanoracks) was awarded a funded Space Act Agreement of 218 million dollars in December 2021, amended in April 2024 to reflect the name change, featuring an 8-meter diameter metallic habitat with docking node, power and propulsion element, and robotic arm all launched simultaneously.

Three additional companies received unfunded Space Act Agreements in 2023. Sierra Space was awarded an unfunded Space Act Agreement in 2023 to develop the Pathfinder expandable woven fabric habitat, described as fully functional in a single launch. SpaceX was awarded an unfunded Space Act Agreement in 2023 to develop an integrated LEO architecture using Starship as transportation and station element. Vast Space was awarded an unfunded Space Act Agreement in 2023 to develop microgravity and artificial gravity stations (Haven-1 and Haven-2).

In October 2023, Northrop Grumman and NASA terminated their funded Space Act Agreement for commercial space station development. Northrop Grumman was originally one of three funded Space Act Agreement recipients in 2021 but is no longer in the commercial space station program.

NASA's contract and funded Space Act Agreements with commercial companies provided nearly 530 million dollars in funding upon successful completion of milestones. NASA informed companies it anticipates approximately 1 billion dollars to 1.5 billion dollars over fiscal years 2026 through 2031 for funding agreements or contracts. NASA had expected the 1 billion dollars to 1.5 billion dollars budget to fund two or more Space Act Agreements. However, as of March 2026, NASA officials clarified that the 1 billion dollars to 1.5 billion dollars budget may only be sufficient to support one commercial space station.

The GAO analyzed 35 NASA major projects that launched between 2011 and 2025 and found that on average it took projects a little over five years to go from beginning development to launch. If Phase two agreements are awarded in 2026, companies would have only approximately four years to have stations certified, launched, and on-orbit by 2030.

Shifting Strategy Mid-Course

In August 2025, the Acting NASA Administrator signed a directive changing the acquisition strategy to accelerate the move to commercial stations within the planned budget profile. Then, in March 2026, NASA announced an alternative approach proposing a government-owned Core Module that would attach to the ISS. NASA's alternative approach includes two commercial modules attaching to a government-owned Core Module. After detaching from the ISS, NASA's Core Module would become the Core Space Station, a NASA-owned, free-flying platform. NASA plans to develop a Power and Cooling Module for the Core Space Station.

As of May 2026, NASA had not finalized its acquisition approach for commercial space stations. NASA officials indicated they plan to evaluate which approach to proceed with in the summer of 2026.

The Risk of a Capability Gap

GAO identified four main risks that could lead to a gap in continuous human presence in low-Earth orbit. A 2024 industry analysis found that a one to two year gap in LEO operations, without mitigation, would negatively affect all companies interviewed. Companies reported that a 1-to-2-year gap in LEO operations would result in potential loss of significant revenue, capabilities, or going out of business. The effects of a gap in LEO operations on companies would increase each year.

The broader consequences are stark. A gap in continuous U.S. LEO presence could result in a decrease or loss of commercial LEO space economy viability. A gap in continuous U.S. LEO presence could result in loss of LEO-based science and technology research. Continuous LEO presence supports risk reduction for Moon, Mars, and beyond missions. A gap in continuous U.S. LEO presence could threaten maintaining U.S. leadership in LEO.

The competitive dimension looms large. The U.S. has continuously had crew operating for over 25 years aboard the ISS. China now has a continuous presence in LEO with its Tiangong space station.

Currently on the ISS, NASA performs about 100 research investigations per 6-month mission increment. The ISS National Laboratory performs an additional 100 research investigations per 6-month mission increment. NASA estimates an initial decrease in research capability compared with the ISS upon transition to commercial stations. The extent of initial research capability decrease upon transition to commercial stations depends on the number of stations certified and when they are launched.

Political Stakes

This investigation was requested by Sen. Ted Cruz, Chairman of the Committee on Commerce, Science, and Transportation. Cruz asked GAO to review issues related to NASA's plans to deorbit the ISS and transition from the ISS to commercial space stations.

U.S. policy under 51 U.S.C. § 70501 calls for an uninterrupted capability for human space flight and operations in LEO to ensure continued U.S. participation and leadership in space. The National Aeronautics and Space Administration Transition Authorization Act of 2017 directed NASA to plan for an orderly transition from government-funded ISS operations to a LEO economy where NASA is one of many customers. Congress has also mandated that the ISS National Laboratory maximize utilization: the National Aeronautics and Space Administration Authorization Act of 2005 designated the U.S. segment of the ISS as a National Laboratory and directed NASA to increase ISS utilization by other federal entities and the private sector.

What's Next

GAO made recommendations directed to the NASA Administrator in coordination with the Space Operations Mission Directorate. NASA concurred with both GAO recommendations. GAO's first recommendation is that the NASA Administrator should use its risk management process to assess the likelihood and duration of a gap in continuous capability or human presence in LEO, including plans to mitigate the likelihood of a gap, if necessary. The status of GAO's first recommendation is open.

The ISS requires a regular cadence of four to five cargo flights per year to maintain operations and conduct a controlled deorbit. As of February 2026, the SpaceX Crew Dragon is the only certified vehicle to fly NASA crews to the ISS. The Boeing Starliner is currently going through certification to fly NASA crews to the ISS. For cargo resupply to the ISS, two certified vehicles exist: SpaceX Cargo Dragon and Northrop Grumman Cygnus. NASA may order Dream Chaser resupply flights from Sierra Space once it successfully launches.

Commercial stations will require a crewed on-orbit demonstration of a minimum capability of four crew for 30-day missions. NASA's target for commercial station crewed on-orbit demonstration is no later than 2030.

The Bottom Line

The transition from the International Space Station replacement to commercial LEO stations remains NASA's highest-stakes undertaking in human spaceflight. The agency faces a compressed timeline, constrained budgets, competing architectural approaches, and the specter of a capability gap that could have consequences extending decades into America's space future. The decisions made in the coming months will determine whether the United States maintains continuous presence in low-Earth orbit or cedes that advantage to international competitors.

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