SpaceX gets into the spy game

The entrance to the SpaceX Starbase launch pad in Texas. - The New York Times

THE recent breakthrough took place some 1,000km above Earth.

For the first time, the Pentagon’s Space Development Agency (SDA) used lasers to securely transmit data at light speed between military satellites, enhancing the ability to track and, if needed, intercept enemy missiles.

This milestone wasn’t just a victory for the Pentagon — it marked a defining moment for SpaceX, Elon Musk’s rising military contractor.

Over the past year, SpaceX has made a big push into military and spy satellite manufacturing, traditionally dominated by giants like Raytheon and Northrop Grumman.

This expansion coincides with the Pentagon’s race to build new low-Earth orbit satellite constellations, largely in response to China’s growing space-based military capabilities.

While the Pentagon welcomes SpaceX's innovation, Musk’s increasing dominance in this sensitive sector raises questions.

The entrepreneur’s extensive business interests in China and ties to foreign leaders, including possible interactions with Russian President Vladimir Putin, fuel concerns. His unpredictable nature also poses challenges in an industry where security equates to stability.

“The complication is that you’re incredibly dependent on a privately held company with little transparency,” said Todd Harrison, a former space executive now with the American Enterprise Institute. “And it’s controlled by the richest man in the world, heavily involved in global politics and foreign relations.”

Dominating the commercial space race

SpaceX has already disrupted two major sectors: satellite launches with its Falcon 9 rockets and communications via its Starlink constellation, boasting over 6,400 satellites.

Now, it’s supplying satellite buses — the core structures minus sensors and equipment — to US spy agencies and military networks, playing a critical role in missile defence and enemy surveillance.

The SDA contract, while modest at US$149mil for four satellites, signals larger ambitions.

“We’re going to do this with hundreds of satellites,” said SDA director Derek Tournear. Future contracts could see Musk’s influence grow exponentially.

However, Musk’s penchant for controversy complicates matters. His support for divisive political figures and propagation of conspiracy theories contrasts with the military’s preference for discreet, dependable partners.

“Elon Musk appears very self-interested, and that’s concerning,” noted Representative Adam Smith, ranking member of the House Armed Services Committee.

Balancing innovation and dependence

The Pentagon faces a dilemma: China’s rapid advances necessitate swift innovation, and SpaceX delivers — reliably and affordably.

Yet, three senior defence officials warned that reliance on one company risks creating a vertically integrated monopoly, stifling competition and inflating costs.

“Vendor lock” could undermine long-term security and innovation, they said anonymously.

This risk was evident when the Federal Aviation Administration temporarily grounded SpaceX’s Falcon 9 rockets three times this year due to minor issues, leaving the Pentagon with limited launch options.

“Having a major launch system paused is definitely unsettling,” admitted Richard Kniseley from the Space Force.

An uneven playing field

Despite efforts to foster competition, SpaceX remains dominant.

A new US$5.6bil launch programme aimed to distribute contracts among emerging companies. Yet, the first US$733mil batch went entirely to SpaceX, the only bidder ready to meet requirements.

Future rounds may include contenders like Jeff Bezos’ Blue Origin, but for now, Musk’s firm reigns supreme.

SpaceX’s integration into military operations extends beyond launches.

The National Reconnaissance Office (NRO) awarded it a US$1.8bil contract to deploy spy satellites using advanced buses co-developed with Pentagon funds.

Essentially, SpaceX builds, launches, and helps operate key components of US defence networks — a level of control raising eyebrows among competitors and policymakers alike.

“They earned their place by innovating,” acknowledged Adam Spice, CFO of Rocket Lab. “But they’re now the 800-pound gorilla in the room.”

Global concerns

Pentagon officials stress they mainly liaise with SpaceX COO Gwynne Shotwell, not Musk himself. They claim classified information is walled off from him, though questions remain about his security clearance and international dealings.

Nasa administrator Bill Nelson recently called for investigations into Musk’s alleged conversations with Putin, citing potential risks to national security.

Meanwhile, SpaceX’s dominance shows no sign of waning.

The Space Force is set to spend up to US$13bil on satellite communications over the next decade, with SpaceX already receiving the lion’s share.

Even Nasa’s future Moon missions rely on the company’s Starship rocket, designed to cut costs and launch larger payloads — likely cementing its market leadership.

Innovation vs oversight

As the Pentagon balances innovation with oversight, concerns about monopolisation grow.

“SpaceX can warp any competition,” warned Mandy Vaughn, CEO of GXO, a space consultancy firm.

This concentration of power, she argued, could stifle the very innovation the military depends on to stay ahead.

For now, SpaceX remains indispensable. The question is whether its dominance fuels American security — or becomes a risk the Pentagon cannot afford. — ©2024 The New York Times Company