Elon Musk has used Donald Trump’s war in Iran to quintuple the amount he’s charging the Pentagon for SpaceX services.
The Defense Department has relied heavily on the tech broligarch’s satellite internet platform, Starlink, to guide LUCAS drones, otherwise known as “kamikaze” or “suicide” drones, in its attacks on the Islamist regime.
Representatives of SpaceX met with military officials within weeks of the start of Trump’s war to argue that the Pentagon ought to be paying $25,000, rather than $5,000, for the privilege, Reuters reports, citing internal documents and sources familiar with the matter.
Defense Department personnel shot back that the $25,000 monthly fee was supposed to apply only to piloted aircraft. They eventually buckled and agreed to pay the higher rate.
Sources told Reuters the episode speaks to “increasing tensions between SpaceX and the Pentagon over Starlink pricing in recent months.”
Other disputes include a pricing plan for how to increase cell service for Iranian citizens, who are currently subject to communications blackouts imposed by the regime.
The spat also shows how Musk’s company “certainly has the U.S. government over the barrel,” according to Clayton Swope, senior fellow at D.C. national security think tank, the Center for Strategic and International Studies.
Much of that leverage, Swope explained to Reuters, comes from the fact that there’s a large private market for Starlink services, with government contract work accounting for only a fifth of SpaceX’s annual revenue.
The news of Musk’s price increase for the Pentagon comes as the tycoon appears to have smoothed over his spectacularly messy public divorce from Trump last year.
The Tesla CEO threw his entire weight behind the president’s 2024 campaign and briefly served as chief of Trump’s flagship cost-cutting DOGE initiative last year.
The two men fell out after Musk took aim at Trump’s spending proposals, leading to a bitter war of words that ended with Musk accusing Trump of refusing to release Justice Department documents on Jeffrey Epstein, a former friend of the president, because his own name featured prominently in the files.
Musk briefly floated launching his own “America Party” last summer. But the pair made peace after the fatal shooting of conservative activist Charlie Kirk in September and were photographed together at Kirk’s funeral.
The SpaceX founder accompanied Trump on a formal state visit to China this month and was unusually included on a phone call between Trump and Indian Prime Minister Narendra Modi in March, weeks into Trump’s war with Iran, despite no longer holding any formal government role.
The Daily Beast has contacted the Pentagon and SpaceX for comment on this story.
