Starshield, Elon Musk’s secret weapon to (finally) make money with Starlink – Business AM

Starshield, Elon Musk's secret weapon to (finally) make money with Starlink - Business AM

At the beginning of December, SpaceX presented a new system: Starshield. What finally bring some money into the coffers.

Why is this important?

By Elon Musk’s own admission, Starlink is losing money. With Starshield, which is based on the same technology, the multi-billionaire may have found a way to raise the bar.

In the news : Starshield, SpaceX’s new cash cow?

  • Asked by Business Insiderseveral analysts believe that Starshield was essentially designed to allow SpaceX to make money from Starlink.
  • Because so far, Starlink does lose money to SpaceX… and therefore to Elon Musk.

The detail : contract with the US government.

  • While SpaceX has yet to release much information about Starshield, the system is known to rely on Starlink technology. And that it is for government use only.
    • Starshield aims to provide a “secure satellite network to US government entities” supporting “national security efforts”.
    • Concretely, SpaceX satellites will have three applications for Washington:
      • Better observe the globe and the activity in each country.
      • Secure communications.
      • Accommodate “payloads” (for intelligence or counterintelligence, for example).
  • According to analysts, Starshield will allow Starlink to benefit from “alternative sources of income”.
  • The money that SpaceX will earn via Starshield remains quite difficult to assess.
    • Brad Grady, director of research at consulting firm Northern Sky Research, notes, however, that providing satellite connectivity to governments and the military is “a growing opportunity” that is expected to be worth more than $90 billion over the course of the year. of the next decade.

As it stands, Starlink is not viable

The context : SpaceX will need it.

  • Last October, Elon Musk acknowledged that Starlink was “still losing money”.
    • Remarks made in the context of the file surrounding the sending of Starlink terminals to Ukraine. He had specified that SpaceX was burning approximately $20 million per month by providing service to the country at war.
    • At the same time, the boss of SpaceX had complained about the lack of support from Washington. He had even threatened to cut Starlink in Ukraine, before changing his mind.
  • With just over a million users worldwide, Starlink is far from viable. He would need five to ten times more, according to Bill Ray, analyst vice president of the management consulting firm Gartner.
  • Since Starlink may not hit those numbers anytime soon, it has to rely on government and military contracts to weather the storm. Hence the deployment of Starshield.