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Friday, March 1, 2024

Amazon awards launches to SpaceX, its main internet satellite rival

Amazon announced Friday that it has signed a contract with SpaceX, its main rival in the internet satellite business, for three launches of its Kuiper satellites as it faces a deadline to get its spacecraft into orbit.

The contract is a victory for SpaceX and further demonstration that its Falcon 9 rocket has become the workhorse for the United States space industry. It also comes months after an Amazon shareholder accused the company in a lawsuit of not awarding a launch contract to SpaceX because of a rivalry between Amazon founder Jeff Bezos and SpaceX founder Elon Musk.

Amazon previously had announced contracts with three other rocket companies, including Blue Origin, Bezos’s space venture. But none of those rockets has ever flown, and under its license from the Federal Communications Commission, Amazon needs to get half of the 3,236 satellites it plans for its service into orbit by July 2026. (Bezos also owns The Washington Post. Interim Post CEO Patty Stonesifer is a member of Amazon’s board.)

SpaceX’s Starlink satellite internet service is already operational and expanding its reach rapidly, with some 5,000 satellites in orbit. Amazon launched its first two prototype satellites only in October. The company has said those two are operating as expected, “validating key technologies that underpin the network.”

Both services are designed to beam internet signals to ground stations in remote areas that don’t have reliable access to broadband.

In a statement, Amazon said the launches on SpaceX would happen in 2025. It noted the proven track record of the Falcon 9, saying it “has completed more than 270 successful launches to date.”

To compete with SpaceX, Amazon has said it intends to invest $10 billion in Kuiper and last year said it would launch its satellites on Blue Origin’s New Glenn rocket, the United Launch Alliance’s Vulcan and Arianespace’s Ariane 6. But all three have faced delays as Amazon faces a time crunch.

Those launch contracts sparked a lawsuit, filed in August by an Amazon shareholder, that alleges the company breached its fiduciary duty by failing to consider giving the launch business to SpaceX, one of the most affordable and reliable launch providers in the world.

“By excluding SpaceX, Bezos and his management team minimized bid competition for the launch agreements and likely committed Amazon to spending hundreds of millions of dollars more than it would have otherwise had to,” the suit says.

It also alleges that driving Amazon’s failure to award launch contract to SpaceX was the rivalry between Bezos and Musk. “Given their bitter track record, Bezos had every reason to exclude Musk’s SpaceX from the process entirely,” the lawsuit says. “And Bezos, it must be assumed, could not swallow his pride to seek his bitter rival’s help to launch Amazon’s satellites.”

Last year, Dave Limp, then Amazon’s senior vice president for devices and services, said an in interview with The Washington Post that Amazon was “open to talking to SpaceX. You’d be crazy not to, given their track record.”

He said then that the Falcon 9 “is probably at the low end of kind of the capacity that we need.” But he added that the company could use its Falcon Heavy or Starship, which have the ability to lift more mass to orbit.

Limp will assume the chief executive’s role at Blue Origin on Monday.

Amazon celebrated the successful flight of its two prototypes, but said it still had a long road ahead.

“Kuiper was an idea on a piece of paper a few years ago, and everything we’ve learned so far from our protoflight mission validates our original vision and architecture,” Rajeev Badyal, vice president of technology for Project Kuiper, said in a statement. “We still have a lot of hard work ahead, and scaling for mass production won’t be easy.”

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