Hi everybody and welcome back to the Elon Musk podcast.
Today we'll be discussing an essential milestone that SpaceX
recently achieved, securing its first ever contract with the US
Space Force for satellite communications via Star Shield.
Now, the contract was officially confirmed on September 1st,
according to Air Force spokesperson and Stefanik, and
we'll discuss how Star Shield operates over the existing
Starlink satellites and serves as a secured network exclusively
for governmental agencies. The deal has a budget ceiling of
$70 million and will support various arms of the US military
like the Army, Navy, Air Force, and Coast Guard.
And what makes this even more interesting is that the contract
comes on the heels of Spacex's role in the Ukaryan conflict,
where it provided Internet connectivity to the Ukrainian
military. The STAR Shield contract marks a
significant moment for SpaceX as it diversifies its service
offerings and the STAR Shield network designed for
governmental entities, will operate over the existing
infrastructure of the current Starling satellites.
Now to put it into perspective, SpaceX will provide what's
called end to end service through this contract, and this
comprehensive package includes everything from user terminals
and ancillary equipment to network management and various
other services. And the US Air Force
representative confirmed that the contract lasts for one whole
year with the possibility of extensions in the future.
With his contract financial framework, $15 million has
already been earmarked for SpaceX to be obligated by the
end of September. We have to consider that this is
not an isolated instance of Spacex's involvement with the
fence, and previously SpaceX had one other contracts.
And the Pentagon has already been categorized as a high value
buyer for SpaceX, and SpaceX has crafted 2 separate but
interlinked satellite communication systems, Starlink
for civilians and Star Shield for government.
And while both operate over the same Starlink satellite network,
they serve completely different purposes in completely different
clientele. Elon Musk clarified on the
platform formerly known as Twitter that Star Shield will be
under the US government's ownership and controlled by the
Department of Defense Space Force.
The civilian Starling network will remain independent and
won't participate in combat operations.
Now what this bifurcation allows is a dual use system where they
can serve different sectors without compromising on the
quality or security of services provided.
Now, this new US contract for the US Space Force certainly
isn't Spacex's first dance with the defense sector.
The Pentagon has relied on SpaceX for a number of rocket
launches, indicating a level of trust and satisfaction with the
services that they provide. And the work with the Department
of Defense and other military branches by SpaceX showcases the
versatility and adaptability of these technologies.
And the very nature of these contracts often necessitate
strict requirements for reliability, security, and
efficiency. Aspects.
Where SpaceX has repeatedly proven its mettle would be an
oversight to discuss the contract without acknowledging
Spacex's role in the ongoing Ukraine conflict.
And SpaceX has been providing Internet connectivity to
Ukraine's military, aiding their fight against invading Russian
forces from the beginning. The decision was not without its
complications, though. Last year, SpaceX made the
choice not to extend starlet coverage to Russian occupied
Crimea, a move that some say had a significant impact on
Ukraine's military operations. And these actions have garnered
attention even from policy officials, highlighting the
geopolitical influences SpaceX and its technologies, Wheel Now,
Spacex's involvement in global conflicts, and now its contract
with the US Space Force have led to a more nuanced role for the
company and in world affairs. And while Elon Musk doesn't hold
any official diplomatic titles, the influence of Spacex's
technologies, particularly in communications, is something
that can't be easily dismissed. Should be mentioned that earlier
in June that the Pentagon had already signed another contract
with SpaceX to provide satellite connectivity for Ukraine's
military. And as we move forward, they'll
be crucial to manage this new found influence responsibility
and ensure that the technologies are used for the betterment of
society and global stability. Now let's move on to Jeff
Bezos's rocket company. Completely separate topic, but
still in the realm of space. The recent FAA closure of the
investigation into Blue Origin, the New Shepherd rocket mishap
that took place on September 12th of 2022 of the unmanned
rocket faced A catastrophic engine failure, resulting in the
booster being destroyed in the capsule deploying its emergency
escape system. And according to the FAA, the
issue stemmed from a structural failure of an engine nozzle
brought about by higher than expected engine operating
temperatures, and this problem led to an unintended alteration
in the Rockets trajectory about a minute after its liftoff from
Blue Origins West, TX launch site.
However, the capsule which was carrying scientific payloads,
executed its emergency escape system and landed safely.
The FAA investigation concluded with 21 corrective measures the
Blue Origin is mandated to implement, including an engine
and nozzle component redesign. Blue Origin, though currently
grounded, indicated in the social media statement that
flights would resume shortly. Blue Origin, which was founded
by Jeff Bezos, had been successfully operating
suborbital flights since the summer of 2021, and in that
period New Shepherd launched 6 crude flights transporting a
total of 31 people with some notable passengers including
William Shatner and Michael Strahan.
So it's safe to see that the New Shepherd program was an integral
part of Blue Origins overall enterprise, constituting A
considerable chunk of the revenue and public reputation.
Now the FA A's decision to ground the New Shepherd program
temporarily has had a palpable effect on Blue Origins business
plans. For company that had ambitions
to send customers on 10 to 12 minutes suborbital flights, the
hiatus comes as a significant setback, especially with the
booming interest in space tourism.
And on the other front, Blue Origin recently announced a
change in leadership, CEO Bob Smith stepping down to be
succeeded by former Amazon executive Dave Limp.
Now this transition is likely to be pivotal as the company looks
to steer through the challenges brought on by the recent mishap.
Blue Origin is not alone in the commercial Space Flight area
though. The principal competitor, Virgin
Galactic, also had to go through a FAA investigation post Richard
Branson space trip leading to a two year pause in their
operations and Virgin Galactic resume flights with their first
paying customers in May of 2023 and it's currently preparing for
their Galactic 04 mission. Virgin Galactic and Blue Origin
are looking to capture a significant share of the space
tourism market, with ticket prices ranging from $250,000
initially around 450,000 currently for Virgin Galactic.
With a waiting list of more than 800 people, the demand for such
experiences is definitely apparent.
Interestingly, both companies have customers who have also
shown interest in their competitors.
For example, Sharon and Mark Hagel from Winter Park, FL had
flown with Blue Origin in March 2022 and are on the waiting list
for Virgin Galactic. The second trip with Blue Origin
is on hold, pending FA A's final nod for New Shepherd's return to
Flight. And while space tourism is a
noteworthy segment of Blue Origins plans, it is far from
being their only focus. The company has ambitious
projects that include the launch of its new Glen heavy lift
rocket from Cape Canaveral, FL, a lunar Lander for NASA's
Artemis missions, and a commercial space station named
Orbital Reef, And for Blue Origin, the Fe A's decision to
close the investigation may mark a turning point.
The company is required to adhere strictly to 21 corrective
measures outlined by the FAA, some of which may necessitate
significant engineering efforts. The timely implementation of
these measures is critical, especially with these ambitious
projects waiting in the wings, and the FA A's final report,
though not publicly available due to proprietary and US export
control reasons, states that public safety was not
compromised during the mishap. The FAA also clarified that the
investigations closer does not indicate an immediate
presumption of the New Shepherd launches.
Blue Origin needs to implement all corrective actions that
impact public safety and receive a license modification from the
FAA prior to their next launch. Regulations are an essential
aspect of any burgeoning industry and the commercial
space sector is no exception. What transpired with Blue Origin
can serve as an instructive episode for other companies in
the industry, underscoring the significance of safety measures
and regulatory compliance. Now, thank you so much for
listening to the show today. We hope you found this
discussion pertinent and beneficial, and if you enjoyed
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