Elon Musk’s SpaceX had reportedly requested a price hike from the Pentagon for the use of its Starlink network during the Iran war, leading to tensions between the two.
Senior officials from SpaceX have claimed that the Pentagon has been undercompensating for their satellite Wi-Fi network connection, which plays a key role in guiding U.S. kamikaze drones, reported Reuters on Tuesday.
The military had been shelling out around $5,000 per terminal, while the service they were availing was valued closer to $25,000, as per Reuters’ sources and Pentagon documents.
The disagreement is centered on the use of Starlink on LUCAS suicide drones, a cost-effective U.S. model comparable to Iran’s Shahed. The Pentagon and SpaceX also differ on the pricing for a plan to provide direct-to-cell connections with Starlink, similar to 5G service, to assist Iranian citizens in circumventing government-imposed communication blackouts.
Despite the Pentagon’s objections, it eventually conceded to SpaceX’s proposed price increase, nearly doubling the cost of each LUCAS drone. The Pentagon is now exploring other competitors, but currently, no other company provides a comparable alternative to Starlink.
Pentagon and SpaceX did not immediately respond to Benzinga‘s requests for comment.
Pentagon’s Complex Tech Ties
The dispute highlights the Pentagon’s growing reliance on SpaceX for critical national security operations, which in turn strengthens Elon Musk’s influence over critical areas of national security. It also comes as SpaceX seeks to increase revenue ahead of a potential landmark IPO expected next month.
In February, the Trump administration covertly smuggled around 6,000 Starlink satellite internet terminals into Iran following the regime’s brutal crackdown on protesters. These devices, although illegal in Iran, are used by thousands of Iranians to bypass government censorship.
Besides SpaceX, the Pentagon is involved in a feud with Anthropic, wherein the AI company has been labeled as a supply chain risk by the department. In a recent court hearing, the Pentagon defended its decision to restrict Anthropic’s access to new Defense Department work, prompting legal challenges from the company. However, judges expressed skepticism during proceedings, with one calling the Pentagon’s action a “spectacular overreach” and questioning claims of malicious intent against Anthropic, saying there was no evidence supporting such allegations.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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