A dispute has broken out between the United States military and Elon Musk’s SpaceX over the cost of satellite internet services used in military operations.
According to a report from Reuters, SpaceX increased the monthly connection fees fivefold for terminals attached to American kamikaze drones. The price jumped from $5,000 to $25,000 per month for each terminal.
The disagreement centres on the LUCAS suicide drone, a relatively cheap American weapon system that uses satellite tracking to home in on targets. SpaceX executives approached defense officials shortly after a bombing campaign began, arguing that the military was using a high-tier aviation service but only paying for standard land or mobility rates.
Pentagon officials initially resisted the price hike. They noted that the drones only use the internet connection for a few hours at most before destroying themselves on impact, meaning they should not be billed at the same rate as a permanent aircraft installation. However, with operations ramping up, the military ultimately agreed to the higher fees. This change nearly doubles the total cost of operating each drone, which previously cost about $30,000 to build and deploy.
The tension highlights the growing reliance of the American military on commercial technology controlled by a single company. SpaceX currently operates about 60 per cent of all satellites in orbit, leaving the government with few viable alternatives for global, high-speed battlefield communications.
A second conflict has also emerged over internet access for civilians. The Pentagon has been trying to launch a direct-to-cell Starlink service to help citizens bypass local government network blackouts. SpaceX proposed a $500 million upfront fee to launch the service, alongside a $100 million monthly operating fee, which defense officials say is far too expensive.
While the Pentagon says it is actively looking for competitors to foster a more open market, defense experts note that SpaceX holds significant leverage because its primary business relies on commercial customers rather than government contracts.
Despite the ongoing arguments over pricing, internal documents show the military is still planning to buy more than 3,500 additional specialized Starshield subscriptions from SpaceX.
Update: Sean Parnell, the Assistant to the Secretary of War for Public Affairs, Chief Pentagon Spokesman & Senior Advisor to SECWAR, clarified on X this Reuters story is incorrect. “The Fake News media has the story wrong, again. @SpaceX remains a strong and valued partner to the Department of War. The claims in this article are simply not based in reality and do not reflect the close, effective collaboration between our teams.”
Musk also said, “Reuters article is false. They made improper use of the Starlink civilian system for military purposes. Direct violation of terms of service.”
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