Zinger Key Points
- SpaceX's Starlink is a high-speed, low-latency satellite internet service.
- Musk's decision to provide Ukraine with Starlink services at little cost is weighing on the business which is yet to turn to black.
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Last week, Elon Musk spoke about the out-of-pocket expenses SpaceX has to incur to provide connectivity to war-torn Ukraine. A new report now suggests that the Musk-led venture may no longer be able to bear the cost.
What Happened: SpaceX notified Pentagon that it may stop funding internet services to Ukraine. It had asked the U.S. military to cover the costs associated with the use of Starlink by the Ukrainian government and military, said CNN in an exclusive report, citing documents it had access to.
In a letter to the U.S. Defense Department, SpaceX said the expenses for providing Ukraine with the internet could run up to over $120 million for the remainder of the year and about $400 million over the next 12 months, the report said.
See Also: Elon Musk Says Starlink Still Far From Cashflow Positive: 'Any Support Is Super Helpful'
When the Tesla Inc. TSLA CEO was notified of the report by one of his Twitter followers, he offered more clarity on the issue.
SpaceX is not asking to recoup past expenses, but also cannot fund the existing system indefinitely *and* send several thousand more terminals that have data usage up to 100X greater than typical households. This is unreasonable.
— Elon Musk (@elonmusk) October 14, 2022
Why It’s Important: When Elon Musk initially supplied Starlink terminals to Ukraine in late February, he was lauded for helping restore connectivity in a country ravaged by war.
Musk’s peace plan for the Russia-Ukraine war floated earlier this month, however, did not go down well with the Ukrainian authorities.
The billionaire justified his stance by stating his intention was to avoid a potential nuclear war. He even suggested that he stayed up all night thinking of possible ways to deescalate the war.
Since then, Ukraine has reported Starlink outages. CNN said, citing sources that the outages affected the entire frontline and thwarted the Ukrainian military’s attempt to push past it. Starlink was the only communication mode available for the military, sources said, according to CNN.
Read Next: How Did Elon Musk make his money
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