Starlink has proved its worth in combat. But winning on the battlefield has opened a bitter new front — this time between Elon Musk's SpaceX and the US Pentagon over who pays what. SpaceX insists the Pentagon has been enjoying a premium service at a bargain-basement price.
Foreign media, citing informed sources and internal Pentagon documents, reported that SpaceX executives met Pentagon officials face to face shortly after the United States launched its bombing campaign against Iran. Their message was blunt: the US military was paying roughly US$5,000 per terminal connection for a service actually worth closer to US$25,000 — a fourfold gap.
This row did not erupt overnight. For months, the two sides have been grinding away at each other over Starlink's use on LUCAS kamikaze drones — low-cost American weapons reverse-engineered from Iran's Shahed-136, designed to loiter over a target before diving in for the kill. Beyond drone pricing, the two sides have also failed to agree on the cost of direct-to-cell services.
Under a 2023 agreement, SpaceX supplied the Pentagon with the military version of its system — "Starshield" — not the consumer-grade Starlink terminals sold at stores like Walmart. Starshield terminals, according to people familiar with the matter, can connect to both commercial Starlink satellites and a separate, more secure military satellite constellation that also carries the Starshield name.
SpaceX argues that the combat environment in which LUCAS drones operate should qualify for an aviation-tier subscription, not the cheaper ground or mobility-tier rate. The Pentagon pushed back hard. The US$25,000 monthly rate, it said, was designed for manned aircraft — not for kamikaze drones that connect for only a few minutes to a few hours at a time.
In the end, the Pentagon blinked. To keep the strikes against Iran going, it accepted SpaceX's higher pricing. The consequence was immediate: the unit cost of each LUCAS drone nearly doubled, climbing from roughly US$30,000 to close to US$60,000.
Reuters put its finger on the deeper issue. These disputes reveal just how dependent the Pentagon has become on SpaceX — and how much leverage that dependence hands to Musk on matters central to US national security. The timing matters too: SpaceX is preparing for an IPO next month that could rank among the biggest listings in history, giving the company every incentive to push revenue higher beforehand.
Since the Ukraine Crisis in 2022, Starlink has become indispensable to modern warfare. SpaceX now operates around 10,000 satellites in orbit — more than 60 percent of all active satellites worldwide. That scale dwarfs the satellite constellations of rivals like OneWeb and Amazon.
But the Ukraine Crisis also gave the world its first hard look at the risks of Starlink dependency. During a Ukrainian counteroffensive in 2022, Musk abruptly cut service in certain areas, disrupting the advance. Last summer, a US Navy test was derailed when a global Starlink outage left unmanned vessels without connectivity.
Clayton Swope, a senior fellow at the Center for Strategic and International Studies, is blunt: SpaceX has pushed the US government into a no-win position. Unlike traditional defence contractors, SpaceX commands far greater bargaining power in front of the Pentagon. Beyond rockets and AI, it controls a vast commercial Starlink market — and the Pentagon cannot simply walk away. According to documents filed with the US Securities and Exchange Commission, roughly 20 percent of SpaceX's total revenue comes from the US government.
From the start of the Middle East conflict, Starlink was already woven into the core of US military operations. Sources familiar with the matter say that during the bombing campaign, Starshield terminals were deployed on more than a dozen drone models. Then on February 28, the United States struck Iran — and the relationship between the two sides tightened sharply. The very next day, on March 1, Musk responded on X to a photo of a LUCAS drone. He wrote that the drone appears to have a Starlink terminal integrated（找不到原文）, and added: "It is a violation of commercial Starlink terms of service to use the terminal for weapon systems. This applies to all users and is shut down when discovered. There is a separate network called Starshield, which is operated by the US government. This is not under SpaceX control."
The Pentagon quickly denied any breach. But according to two informed sources, SpaceX executives met Pentagon officials again within days, once more insisting the military was paying too little. One source said that although the Pentagon initially agreed to pay more for satellite connectivity on attack drones, senior officials — including the Deputy Secretary of Defense — remained uneasy. During the subsequent ceasefire, the two sides reconvened in April to reopen the pricing discussion.
The dispute is far from settled. According to relevant documents, the Department of Defense is still weighing an additional purchase of more than 3,500 Starshield terminal subscriptions, including 100 higher-priced aviation-tier services. That deal could generate hundreds of millions of dollars in annual revenue for SpaceX. Whether it will be finalised — and at what price — remains unknown.
Meanwhile, The Wall Street Journal previously reported that after large-scale protests erupted in Iran in January, the Trump administration secretly moved more than 6,000 Starlink terminals into the country, claiming the aim was to give local people internet access. The plan backfired: the Iranian government confiscated the devices and deployed jamming equipment to cut the connections.
Almost simultaneously, Pentagon officials opened talks with SpaceX on deploying a "direct-to-cell" service capable of bypassing jamming. The technology functions similarly to 5G, enabling users to connect directly without ground terminals. SpaceX — which earned US$11.4 billion from Starlink in 2025 — quoted an eye-watering price: up to US$500 million to launch the service, plus US$100 million a month for operations. The figure gave Defence Department officials a serious headache. Whether the two sides ultimately struck a deal remains unconfirmed.
The reality is that this bust-up between SpaceX and the Pentagon has spread from drones to mobile phones, and from the Middle East all the way to Washington. There is no sign of it ending anytime soon.
Deep Throat
** 博客文章文責自負,不代表本公司立場 **
