Musk’s SpaceX Strengthens Ties to U.S.

Security Agencies
(The Wall Street Journal, February 21, 2024)

by Micah Maidenberg and Drew Fitzgerald

SpaceX is deepening its ties with U.S. intelligence and military agencies, winning at least one major classified
contract and expanding a secretive company satellite program called Starshield for national security customers.

The Elon Musk-led company entered into a $1.8 billion classified contract with the U.S. government in 2021,
according to company documents viewed by The Wall Street Journal. SpaceX said in the documents that funds from
the contract were expected to become an important part of its revenue mix in the coming years. It didn’t disclose the
name of the government customer.

The size and secrecy of the agreement illustrate a growing interdependence between SpaceX—a dominant force in
the space industry—and the national security establishment.

SpaceX’s work for U.S. defense clients has long included blasting off classified and military satellites. The Pentagon
has more recently done business with SpaceX’s Starlink broadband service, including agreements to pay for
Ukrainian internet links during Ukraine’s war with Russia.

Less is known about SpaceX’s Starshield unit, which is tailored for government clients and counts a former Air
Force general among its leaders. Starshield won a $70 million award from the military last August to provide
communications services to dozens of Pentagon partners. However, the group has largely operated out of the public
eye.

"When I’m never sure what I can say in a public forum, I tend to zip it. But I can say that there is very good
collaboration between the intelligence community and SpaceX,” Gwynne Shotwell, the company’s president, said at
an event in May.

On a webpage made public in late 2022, SpaceX described Starshield as providing satellites capable of handling
secure communications, capturing data about Earth or carrying sensors or other observation instruments for the
government while in orbit.

Starshield’s online job postings have sought people with top-secret clearances, as well as experience working with the
Defense Department and intelligence community.
One advertised position would require the person handling it to represent Starshield to Pentagon combatant
commands—divisions that oversee military operations around the world or specific functions, such as transportation
and cybersecurity.

A SpaceX spokesman didn’t respond to requests for comment.

SpaceX has worked with national security organizations since it was a startup. Shortly after Musk founded the
company in 2002, it won a launch contract with an undisclosed U.S. intelligence customer, the Journal reported
almost two decades ago. Later, SpaceX began handling regular launches for military and spy agencies.

The company also has won significant national-security clients for its satellite technologies—a different set of
offerings from SpaceX’s traditional work blasting off satellites for those customers. One such client has been the
National Reconnaissance Office, according to people familiar with the matter.

Based in a sprawling office park south of Dulles International Airport, the NRO draws staff from different Pentagon
branches and the Central Intelligence Agency, who use satellite data to support national-security and civilian
agencies in the federal government. Its existence was a classified government secret until 1992.

It couldn’t be determined what satellite technology from SpaceX the NRO has tapped.
An NRO spokesman said the agency develops intelligence products with a range of partners. “We are deepening our
relationships with other government agencies, the private sector, academia and other nations,” the spokesman said.

Musk, who also leads Tesla, the social-media company X and other ventures, comes from a Silicon Valley
background that sets him apart from the leaders of most prime military contractors. The Journal has reported that
Musk, who has a security clearance, has used illegal drugs. Government contractors can lose security clearances
because of drug abuse, defined as the use of illegal drugs or prescription medications “in a manner that deviates from
approved medical direction.” Musk has said he hasn’t failed drug tests, and his attorney has said the executive has
never failed a test.

SpaceX’s Shotwell has played a significant role in building the company’s relationship with national-security
agencies, people familiar with those efforts said.

SpaceX executives have touted the company’s capabilities to government buyers, pointing to its ability to rapidly
manufacture satellites and, deploying its partially reusable rockets, launch them to low-Earth orbit at a cadence rivals
can’t match. Leaders at agencies that work closely with SpaceX have praised the company’s technology as
sophisticated and its style as nimble.

Terrence O’Shaughnessy, who joined SpaceX after retiring in 2020 from the Air Force as a general, has had a
highlevel role at Starshield, people familiar with the matter said. A biography posted on a trade group’s website
described him as a “Senior Advisor to Elon Musk on matters regarding SpaceX” as well as vice president of the
company’s Special Programs Group.

He and others have urged the defense establishment to learn from the example set by more agile space startups. Last
year, O’Shaughnessy compared how SpaceX developed Starlink with a government effort to create a similar but far
smaller fleet. The latter “sounds a lot like Starlink,” he said at a conference. “Yet they’re looking for a couple hundred
satellites on orbit.”

About a decade after Musk said SpaceX would develop a satellite-internet business to sell high-speed internet links
to consumers and businesses, the company operates the world’s biggest fleet, with about 5,400 satellites in operation
as of mid-February. Those devices power Starlink, which is marketed for civilian use.

SpaceX’s growing importance to the U.S. government comes as space increasingly becomes a contested arena that
mirrors geopolitical rivalries on Earth. China has been ramping up its space capabilities. Russia has ambitions to
develop a space-based nuclear weapon that could be used to target satellites, U.S. officials said this month.

Satellites play a major role in U.S. national security, tracking missile launches and providing secure communications.
Others monitor activity on the ground using cameras or sensors.

Some Pentagon space leaders want to move away from ordering powerful but large satellites that might take a decade
to build and launch. In their place, they said, they want contractors to quickly launch satellite swarms that can stay
online when other systems fail. Officials are planning for an aggressive pace of military and spy satellite launches in
the years ahead.

SpaceX’s ability to quickly build and launch satellites has been on display during Ukraine’s fight against Russia. Since
the war’s earliest days, the company’s Starlink satellite network has supported communications for Ukrainian civil
society and troops.

The service also has generated tensions. SpaceX’s Shotwell said last year that the company took steps to limit
Ukrainian troops from using it for direct military engagements. This month, Ukraine’s top military-intelligence
officer said Russian invasion forces are using thousands of Starlink terminals in occupied Ukrainian territory to
access internet services.

Musk has said no Starlink terminals, to the best of SpaceX’s knowledge, have been sold directly or indirectly to
Russia. Starlink has said SpaceX takes steps to deactivate terminals if the company determines sanctioned or
unauthorized parties are using them.