Elon Musk, founder of SpaceX, speaks with US Air Force Lieutenant General John Thompson, commander Space and Missile Systems Center commander at Space Pitch Day in San Francisco, California.

US Air Force

ORLANDO, Fla. SpaceX and Tesla CEO Elon Musk urged the Air Force to prioritize innovation and encourage industry competition as the service seeks to create the nation's newest military branch the Space Force.

In a conversation with the top U.S. Air Force officer on space research and acquisition at the Air Warfare Symposium in Orlando last week, Musk said the commercial space industry must try harder to develop reusable rockets. SpaceX is currently the leader in that effort.

"Creating a fully reusable system and having that be in volume production and volume launch that's super, super hard," Musk told Air Force Lt. Gen. John Thompson, adding that designing one-use rockets was "quite easy."

He described Starship, the next-generation rocket SpaceX is developing, as having reusability potential, which would make it the culmination of his vision ofsending people to and from the moon and Mars.

"The vehicle we are working on right now, which is quite difficult, is Starship and that has the potential for full reusability," Musk said Friday, adding that the program was doing well.

An artist's rendering of SpaceX's Starship rocket on the moon.

SpaceX

"But I think it would be great to have other companies as well do full reusability. I think competition is a good thing," he said.

"The Joint Strike Fighter, there should be a competitor ... that's a controversial subject but I don't think it's good to have one provider," Musk said of Pentagon's most expensive weapons system.

He later elaborated on Twitter that the F-35 competitor should be a drone.

"The competitor should be a drone fighter plane that's remote-controlled by a human, but with its maneuvers augmented by autonomy. The F-35 would have no chance against it," he wrote of the Lockheed Martin jet.

Read more: Elon Musk tells a room full of Air Force pilots: 'The fighter jet era has passed'

Throughout his discussion with Thompson, Musk warned that the United States was at risk of falling behind other nations if it did not prioritize innovation.

"This is not something that was a risk in times past but is a risk now," Musk said. "I have zero doubt that if the United States doesn't seek innovation in space it will be second in space."

Musk also predicted that the Chinese economy will eventually surpass the United States' by at least two-fold.

Read more:Elon Musk says Chinese economy will surpass US by 2 or 3 times: 'The foundation of war is economics'

"A thing that will feel pretty strange is that the Chinese economy is probably going to be at least twice as big as the United States' economy, maybe three times," Musk said.

"The foundation of war is economics," Musk said. "If you have half the resources of the counterparty then you better be real innovative. If you're not innovative, you're going to lose."

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Elon Musk urges US military to prioritize space innovation and industry competition, or risk falling behind - CNBC