Hi everybody and welcome back to the Elon Musk podcast. Today we'll be discussing an essential milestone that SpaceX recently achieved, securing its first ever contract with the US Space Force for satellite communications via Star Shield. Now, the contract was officially confirmed on September 1st, according to Air Force spokesperson and Stefanik, and we'll discuss how Star Shield operates over the existing Starlink satellites and serves as a secured network exclusively
for governmental agencies. The deal has a budget ceiling of $70 million and will support various arms of the US military like the Army, Navy, Air Force, and Coast Guard. And what makes this even more interesting is that the contract comes on the heels of Spacex's role in the Ukaryan conflict, where it provided Internet connectivity to the Ukrainian
military. The STAR Shield contract marks a significant moment for SpaceX as it diversifies its service offerings and the STAR Shield network designed for governmental entities, will operate over the existing infrastructure of the current Starling satellites.
Now to put it into perspective, SpaceX will provide what's called end to end service through this contract, and this comprehensive package includes everything from user terminals and ancillary equipment to network management and various other services. And the US Air Force representative confirmed that the contract lasts for one whole year with the possibility of extensions in the future.
With his contract financial framework, $15 million has already been earmarked for SpaceX to be obligated by the end of September. We have to consider that this is not an isolated instance of Spacex's involvement with the fence, and previously SpaceX had one other contracts. And the Pentagon has already been categorized as a high value buyer for SpaceX, and SpaceX has crafted 2 separate but interlinked satellite communication systems, Starlink for civilians and Star Shield for government.
And while both operate over the same Starlink satellite network, they serve completely different purposes in completely different clientele. Elon Musk clarified on the platform formerly known as Twitter that Star Shield will be under the US government's ownership and controlled by the Department of Defense Space Force. The civilian Starling network will remain independent and won't participate in combat operations.
Now what this bifurcation allows is a dual use system where they can serve different sectors without compromising on the quality or security of services provided. Now, this new US contract for the US Space Force certainly isn't Spacex's first dance with the defense sector. The Pentagon has relied on SpaceX for a number of rocket launches, indicating a level of trust and satisfaction with the
services that they provide. And the work with the Department of Defense and other military branches by SpaceX showcases the versatility and adaptability of these technologies. And the very nature of these contracts often necessitate strict requirements for reliability, security, and efficiency. Aspects. Where SpaceX has repeatedly proven its mettle would be an oversight to discuss the contract without acknowledging Spacex's role in the ongoing Ukraine conflict.
And SpaceX has been providing Internet connectivity to Ukraine's military, aiding their fight against invading Russian forces from the beginning. The decision was not without its complications, though. Last year, SpaceX made the choice not to extend starlet coverage to Russian occupied Crimea, a move that some say had a significant impact on
Ukraine's military operations. And these actions have garnered attention even from policy officials, highlighting the geopolitical influences SpaceX and its technologies, Wheel Now, Spacex's involvement in global conflicts, and now its contract with the US Space Force have led to a more nuanced role for the company and in world affairs. And while Elon Musk doesn't hold any official diplomatic titles, the influence of Spacex's technologies, particularly in communications, is something
that can't be easily dismissed. Should be mentioned that earlier in June that the Pentagon had already signed another contract with SpaceX to provide satellite connectivity for Ukraine's military. And as we move forward, they'll be crucial to manage this new found influence responsibility and ensure that the technologies are used for the betterment of society and global stability. Now let's move on to Jeff Bezos's rocket company. Completely separate topic, but
still in the realm of space. The recent FAA closure of the investigation into Blue Origin, the New Shepherd rocket mishap that took place on September 12th of 2022 of the unmanned rocket faced A catastrophic engine failure, resulting in the booster being destroyed in the capsule deploying its emergency
escape system. And according to the FAA, the issue stemmed from a structural failure of an engine nozzle brought about by higher than expected engine operating temperatures, and this problem led to an unintended alteration in the Rockets trajectory about a minute after its liftoff from Blue Origins West, TX launch site. However, the capsule which was carrying scientific payloads, executed its emergency escape system and landed safely.
The FAA investigation concluded with 21 corrective measures the Blue Origin is mandated to implement, including an engine and nozzle component redesign. Blue Origin, though currently grounded, indicated in the social media statement that
flights would resume shortly. Blue Origin, which was founded by Jeff Bezos, had been successfully operating suborbital flights since the summer of 2021, and in that period New Shepherd launched 6 crude flights transporting a total of 31 people with some notable passengers including William Shatner and Michael Strahan.
So it's safe to see that the New Shepherd program was an integral part of Blue Origins overall enterprise, constituting A considerable chunk of the revenue and public reputation. Now the FA A's decision to ground the New Shepherd program temporarily has had a palpable effect on Blue Origins business
plans. For company that had ambitions to send customers on 10 to 12 minutes suborbital flights, the hiatus comes as a significant setback, especially with the booming interest in space tourism. And on the other front, Blue Origin recently announced a change in leadership, CEO Bob Smith stepping down to be succeeded by former Amazon executive Dave Limp. Now this transition is likely to be pivotal as the company looks to steer through the challenges brought on by the recent mishap.
Blue Origin is not alone in the commercial Space Flight area though. The principal competitor, Virgin Galactic, also had to go through a FAA investigation post Richard Branson space trip leading to a two year pause in their operations and Virgin Galactic resume flights with their first paying customers in May of 2023 and it's currently preparing for
their Galactic 04 mission. Virgin Galactic and Blue Origin are looking to capture a significant share of the space tourism market, with ticket prices ranging from $250,000 initially around 450,000 currently for Virgin Galactic. With a waiting list of more than 800 people, the demand for such experiences is definitely apparent. Interestingly, both companies have customers who have also shown interest in their competitors.
For example, Sharon and Mark Hagel from Winter Park, FL had flown with Blue Origin in March 2022 and are on the waiting list for Virgin Galactic. The second trip with Blue Origin is on hold, pending FA A's final nod for New Shepherd's return to Flight. And while space tourism is a noteworthy segment of Blue Origins plans, it is far from
being their only focus. The company has ambitious projects that include the launch of its new Glen heavy lift rocket from Cape Canaveral, FL, a lunar Lander for NASA's Artemis missions, and a commercial space station named Orbital Reef, And for Blue Origin, the Fe A's decision to close the investigation may mark a turning point. The company is required to adhere strictly to 21 corrective measures outlined by the FAA, some of which may necessitate
significant engineering efforts. The timely implementation of these measures is critical, especially with these ambitious projects waiting in the wings, and the FA A's final report, though not publicly available due to proprietary and US export control reasons, states that public safety was not compromised during the mishap. The FAA also clarified that the investigations closer does not indicate an immediate presumption of the New Shepherd launches.
Blue Origin needs to implement all corrective actions that impact public safety and receive a license modification from the FAA prior to their next launch. Regulations are an essential aspect of any burgeoning industry and the commercial space sector is no exception. What transpired with Blue Origin can serve as an instructive episode for other companies in the industry, underscoring the significance of safety measures and regulatory compliance. Now, thank you so much for
listening to the show today. We hope you found this discussion pertinent and beneficial, and if you enjoyed today's show, don't forget to hit the subscribe or the follow button on your preferred podcast platform. It's free, takes just a second, and it helps us out a lot. So thanks for doing that. And until next time, please take care of yourselves and each other and I'll see you in the next one.