A defense vendor raising prices in the middle of a war would normally be a scandal. SpaceX did it anyway.
The Pentagon paid. Now the bill is showing up in the war budget.
Per Reuters reporting, SpaceX leaders met Pentagon staff weeks into the U.S. bombing campaign. Their case was simple.
The military had been paying about $5,000 per Starlink terminal. But it was using a tier worth closer to $25,000.
The fight was about LUCAS drones. These are cheap, U.S.-made attack drones much like Iran's Shahed.
They circle a target before diving in to blow up on impact. SpaceX said the way the military used them looked more like aviation use than ground use.
So the higher tier should apply. The Pentagon pushed back.
It said $25,000 a month is built for aircraft, not drones that use the network for minutes at a time. Then it paid the price anyway.
The price hike almost doubled the cost per LUCAS drone from about $30,000 per unit. The deal shows how much one private firm can shape costs that traders normally track in a 13F filing.
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SpaceX runs about 10,000 satellites in orbit. That is more than 60% of all active ones.
OneWeb and Amazon Leo are still working to catch up. For now, no one else can match the global reach Starlink has.
Clayton Swope, a senior fellow at the Center for Strategic and International Studies, said SpaceX "certainly has the U.S. government over the barrel." About 20% of SpaceX's revenue comes from Uncle Sam.
But the firm also has a huge business in home broadband, rocket launches, and AI. That mix means SpaceX does not have to play nice the way older vendors do.
It is why some traders use moments like this as a clue for smart-money flows into space. The Pentagon told Reuters its buying office is "working to find other competitors."
For now, there aren't any. The risk of leaning on Starlink showed up in 2022.
Musk shut off Starlink in parts of Ukraine as troops moved on Russian targets. That move broke up a key push.
More recently, a global Starlink outage cut off some U.S. Navy boats last summer. The boats were left bobbing in the ocean.
The Pentagon is now looking at buying more than 3,500 more Starshield terminal plans. That includes 100 at the higher aviation rate.
SpaceX has also pitched charging up to $500 million to launch a direct-to-cell service for Iranian citizens. The firm wants a $100 million monthly fee to run it.
SpaceX is heading toward an IPO next month. The deal could be one of the biggest in history.
The leverage is showing up on the price tag.
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