SpaceX had to file suit before winning its first defense orders from the Pentagon. The Pentagon is seeking to enlist Silicon Valley startups in its effort to fund and develop new weapons technology and more-nimble suppliers, as the U.S. races to keep pace with China’s military advances. The push to tap private capital comes in the midst of concern that U.S. defense-industry consolidation has led to dependence on a few large companies that rely on government funding for research and is hampering innovation. Meanwhile, China has pulled ahead in some key technologies, ranging from small drones to hypersonic missiles, helped by Beijing’s use of external public-private guidance funds, according to current and former Pentagon officials.

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