Amazon Taps SpaceX To Launch Kuiper Satellites: 'Elon Musk Owns Jeff Bezos'

Amazon announced on Friday, it has contracted SpaceX to deploy some satellites for the ecommerce giant's Project Kuiper satellite internet network. The Elon Musk company and its own Starlink network are both rivals to (Amazon founder) Jeff Bezos' fledgling rocket company Blue Origin and Project Kuiper respectively. Awkward.

According to the ecommerce giant, SpaceX will deploy an unspecified number of Kuiper satellites in three Falcon 9 rocket launches to low earth orbit(LEO) beginning in mid-2025.

Amazon vowed in 2019 to invest $10 billion, as it aims to build Kuiper as a constellation of 3,236 satellites in LEO to beam broadband internet globally and compete with SpaceX's Starlink network, which already has about 5,000 satellites. The ecommerce giant had already procured 83 rocket launches from Bezos' Blue Origin, Boeing-Lockheed joint venture United Launch Alliance(ULA) and Europe's Arianespace, in a multi-billion dollar deal. There have been delays to some of the launches due to technical issues.

SpaceX's reusable Falcon 9 rockets have been a crucial advantage over rivals in its rapid deployment of Starlink, making the Musk-owned company the world's largest satellite operator. Eutelsat's OneWeb, relied on Russian Soyuz rocket for deploying the bulk of its network. But it turned to SpaceX when Russia invaded Ukraine and seized $50 million worth of the company's satellites.

U.S. regulators require Amazon to deploy half of the Kuiper network by 2026. The company launched its first two prototype satellites in orbit in October and announced successful tests last month. The ecommerce giant expects to deploy enough satellites for "early customer pilots" in the second half of 2024. It plans to use ULA's Atlas 5 and the yet-to-launch Vulcan rocket for the first few batches of satellites.

However tapping a rival like SpaceX must be a hard pill to swallow for both Amazon and Bezos who is a business and personal rival to Musk. SpaceX is a much more advanced rocket and satellite internet company than Blue Origin which is having trouble getting off the ground. As one observer wrote on X, "Awkward. Musk owns Bezos with this launch announcement by Amazon."

Amazon($AMZN) shareholder, Cleveland Bakers and Teamsters Pension Fund, lodged a lawsuit in August, alleging that the Seattle-based company did not adequately consider SpaceX as a launch provider when it was selecting most of the 83 other flights to space in late 2021 and 2022. The Fund claimed that the contracts were the second-largest capital expenditure in the ecommerce giant's history. Whole Foods' acquisition in 2017, was Amazon's largest at $13.7 billion.

The ecommerce giant said the lawsuit's claims "are completely without merit." Friday's launch announcement comes just three days before its deadline to lodge a substantive defense against the shareholder lawsuit, according to court documents. The company had filed a motion in September, to dismiss the lawsuit, saying it would detail its defense in a later briefing. The court set a deadline of Dec. 4 for Amazon to outline its motion to dismiss.