It's been just under 20 months now since Amazon.com (AMZN +1.93%) announced the single biggest space launching campaign in history: A project to contract 93 separate rocket launches from a total of four separate rocket launch providers to put its Project Kuiper satellite constellation in orbit.
(Note for SpaceX fans: Yes, it's true that SpaceX has launched more rocket missions dedicated to its own Starlink satellites -- a total of 126 such launches, in fact. But SpaceX didn't actually announce how many launches it would be making).
Including a single, solitary launch of its first two test satellites with start-up ABL Space Systems (which didn't actually happen -- Amazon ended up launching with United Launch Alliance instead), Amazon said it would fly:
- 47 times with ULA.
- 27 times with Amazon-affiliated Blue Origin (both companies were founded by Jeff Bezos).
- And 18 times with Europe's Arianespace.
But Amazon announced a grand total of zero launches with Jeff Bezos's arch-space rival, Elon Musk and SpaceX.
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Key Data Points
A curious decision
This was a curious decision, to say the least, given that SpaceX was then and still is today the world's biggest rocket launch company -- and also the cheapest to launch with. In August 2023, Amazon actually found itself on the wrong side of a lawsuit by one of its shareholders. The Cleveland Bakers and Teamsters Pension Fund alleged that Amazon "acted in bad faith," yielding to "conflicts of interest," and as a result, overpaid for its launch contracts by "hundreds of millions of dollars" by refusing to work with SpaceX on Project Kuiper.
At last report, this lawsuit was still working its way through the courts. But as we've just learned, Amazon may be taking steps to defang the plaintiff's lawyers and minimize the fallout of its 2022 decision.
On Dec. 1, 2023, Amazon announced that it would be buying some rocket rides from SpaceX after all.
Curiouser and curiouser
Specifically, the AboutAmazon.com blog stated that Amazon has contracted with SpaceX "to support deployment plans for Project Kuiper" by launching three Falcon 9 rockets beginning in mid-2025, supplementing the "earlier procurement of 77 heavy-lift rockets from Arianespace, Blue Origin, and United Launch Alliance (ULA)."
Now, even this brief blog post from Amazon contains several things worth highlighting:
First and most obvious is the fact that Amazon has performed an about-face on SpaceX. Whether this was a tactical decision to defend itself against the Cleveland Bakers and Teamsters Pension Fund lawsuit or simply an economic decision to buy some cheap rocket rides from the lowest-cost rocket launcher on Earth remains to be seen. Either way, it means Amazon will be paying at least a couple hundred million dollars to SpaceX, which is likely to be its biggest rival in satellite internet in the future.
Second, note that Amazon's latest announcement references "77" as the original number of rocket launches purchased rather than 92. The reason is that, back in April 2022, Amazon said that 15 of the 92 launches it was planning were optioned "additional launches" with Blue Origin -- and thus, launches that might or might not actually be needed. So it looks like the three SpaceX launches just announced are coming out of Blue Origin's share of the April 2022 mega-contract.
And if this is the case, then potentially, even more launch contracts might be awarded to SpaceX at Blue Origin's expense. As many as all 15 "additional launches?" Perhaps. And if that's the case, then at $67 million per launch, Amazon just might be willing to deposit as much as $1 billion in the bank account of its primary space competitor as the price of getting its own service in orbit as fast as possible.
Third, finally, and most important of all for Amazon.com investors, Amazon stated that it intends to begin launching satellites en masse "beginning in the first half of 2024, and we expect to have enough satellites deployed to begin early customer pilots in the second half of 2024."
That's actually quite significant.
Get ready for Amazon.com satellite internet
On the one hand, it's obviously not great news for Amazon that it needs to subsidize SpaceX's launch business in order to get its own internet business up and running as fast as possible. Still, consider what that speed might mean for Amazon:
Amazon only launched its first test satellites for Project Kuiper back in October. If it's already contemplating mass launches six months from now and beta testing less than 12 months from now, then that's a really fast timeline. For context, SpaceX didn't begin its "beta" pilot of Starlink service for two-and-a-half years after launching its first test satellites.
Long story short, satellite internet from Amazon.com may be coming a lot sooner than you think.
