Elon Musk Says He Can No Longer Afford to Pay For Ukraine’s Starlink Access, Then Reverses Himself

Elon Musk announced Friday that he would no longer be providing the Ukrainians with free access to his Starlink system, and that if they wanted to continue, they would have to ask the American government to pay for the service. Then, after a large-scale negative response, he reversed himself. A report on Musk’s impending withdrawal of his financial support for the Ukraine’s use of Starlink is here: “Musk to stop funding Starlink for Ukraine after envoy tells him to ‘f**k off,’” by Issam Ahmed, AFP, October 14, 2022:

Elon Musk said Friday his company SpaceX wouldn’t be able to fund the Starlink satellite internet network over Ukraine indefinitely, amid reports he had asked the US military to cover the costs.

The move comes as Musk has been embroiled in public spats with Ukranian leaders who were angered by his controversial proposals for de-escalating the conflict, which included acknowledging Russian sovereignty over Crimea.

Starlink, a constellation of over 3,000 small satellites in low Earth orbit, has been vital to Ukraine’s war effort against Russia, with SpaceX donating some 25,000 ground terminals, according to an updated figure given by Musk last week.

In a series of tweets, the world’s richest man appeared to confirm a report by CNN saying he had written to the Pentagon warning that his financial contributions would come to an end, and that they would need to foot the bill.

“SpaceX is not asking to recoup past expenses, but also cannot fund the existing system indefinitely *and* send several thousand more terminals that have data usage up to 100X greater than typical households,” he tweeted.

“This is unreasonable.”

Musk said the operation has already cost SpaceX $80 million and is projected to exceed $100 million by the end of the year.

But CNN said SpaceX figures shared with the Pentagon show about 85 percent of the first 20,000 terminals in Ukraine were paid at least in part by countries like the US, Poland, or other entities.

They also paid for about 30 percent of internet connectivity.

So despite Musk’s claiming to have paid entirely for Ukraine’s access to Spacelink, it turns out that 85% of the terminals were paid for not by Space-X itself, but by several countries, including the U.S. and Poland. They were also responsible for paying for 30% of the internet connectivity Ukraine required. Musk has not been quite so generous as he apparently wants us all to think.

In overnight replies on Twitter on Friday, Musk expanded on the logistics of the operation.

In addition to terminals, we have to create, launch, maintain & replenish satellites & ground stations & pay telcos for access to Internet via gateways,” he said.

“We’ve also had to defend against cyberattacks & jamming, which are getting harder. Burn is approaching ~$20M/month.”

The “burn” – the amount Space-X has to pay for everything involving the Starlink service to Ukraine – is “approaching” $20 million a month. Let’s assume it has reached $20 million a month at the outside. Is it really possible that Elon Musk, with a net worth that has oscillated between $220 billion and $270 billion, will be burdened by spending $20 million a month to help Ukraine defend its freedom, and indeed, the freedom of the entire Western world, against Russian aggression? He is not being asked for much, comparatively speaking. A “burn” of $20 million a month for the Starlink services to Ukraine amounts to 1/1,000th of his wealth. He really can’t spare that? It would be as if someone earning $200,000 a year were asked to donate a total of $200 of his salary to charity. How onerous would that be?

Besides, Musk needs the public’s goodwill. If he loses that, with a ghastly display of greed, it could affect every part of his business empire, from potential employees deciding they don’t want to work for such a man, to cities and states less likely to approve tax credits for Musk’s businesses, that he will locate his new Tesla or Space-X or SolarRay plants in a particular city or state.

Musk has recently been in a spat with Ukrainian officials including President Volodymyr Zelensky after suggesting a peace deal that involved re-running controversial referenda in Russian-occupied territories in Ukraine.

Musk’s refusal to wholeheartedly back Ukraine in its war against Putin’s aggression, and his suggestion that the referendum that was held earlier in the parts of eastern Ukraine that Russia now occupies be held all over again, are disturbing. Even more outrageous was his earlier suggestion that for the sake of peace Ukraine acknowledge Russian sovereignty in Crimea. The population in the regions of eastern Ukraine — Donetsk, Luhansk, Kherson and Zaporizhzhia — where such a referendum would again be held includes many Russian speakers; and even ethnic Russians. It is quite possible that a rerun of the referendum in those four regions of eastern Ukraine would return a result still favorable to annexation by Russia, but if held this time under U.N. auspices, not be nearly as resounding as the previous “Yes” vote of 96%. And in suggesting a repeat of the referendum, Musk is giving Putin’s claim to the area a legitimacy it does not deserve. Musk may be a technological whiz, but he is lacking in political – and moral — sense.

Musk’s proposals were welcomed by Russia. In response, Kyiv’s ambassador to Germany Andriy Melnyk weighed in, telling Musk to “f**k off.”

“We’re just following his recommendation,” Musk tweeted Friday, along with the shrug emoji.

According to CNN, SpaceX documents sent to the Pentagon said Ukraine had asked for 8,000 more Starlink terminals in July.

The Financial Times meanwhile has reported Starlink outages hit Ukrainian forces on the frontline, hindering their ability to liberate Russian-controlled areas in the east of the country, but the situation later improved.

Were those Starlink outages caused by Russian hackers, or could they have been a signal from Elon Musk that he was running out of patience with the Ukrainians who have gotten used to his free Starlink services, and wanted to remind them that it was time for them to find another funder for continued service?

Even if Elon Musk can be persuaded by his P.R. people, who must be tearing their hair out by now, not to end the free Starlink service for Ukraine, much damage has already been done to his image and, potentially, to his various businesses. How many people might decide not to buy a Tesla as a way to punish Musk, what states and cities might decide to no longer provide tax credits to attract his Tesla plants, the way Austin, Texas recently provided $65 million in such credits to ensure that a Tesla plant was built in the city? Musk likes to present himself as never taking government subsidies – he’s said he’s dead set against them. But over the years, Musk’s companies — Tesla Motors, SpaceX, and SolarCity — have received billions of dollars from government loans, contracts, tax credits, and subsidies.

According to a Los Angeles Times investigation, Musk’s companies had received an estimated $4.9 billion in government support by 2015, and they’ve gotten many billions more since. Perhaps, in his mental universe, there is one rule for Elon Musk –don’t call what he gets “government support” — and another for everyone else?

What kind of fantastic greed makes him so unwilling to part with 1/1000th of his total wealth to supply Ukraine for a full year with Starlink, which will help that country of 43 million people to turn back the Russian aggressors? Is Elon Musk so lacking in sympathy for the Ukrainians that he’s prepared to cut them loose from the Starlink lifeline? It is hard to fathom such a brain, so advanced in some ways, so primitive in others. I hope he changes his mind. But if he doesn’t, I’m inclined to echo the sentiment of Ambassador Melnyk: “F**k off.”

A Happy Ending:

After thinking a bit more clearly about the matter, Elon Musk tweeted urbi et orbi on October 15 that he would after all continue to fund Ukraine’s access to Starlink. Here is how he inimitably put it:

“The hell with it … even though Starlink is still losing money & other companies are getting billions of taxpayer $, we’ll just keep funding Ukraine govt for free.”