Ukraine Says Starshield Speeds Were Cut, Musk Says Pentagon Controls the Limits
Ukrainian officials say SpaceX throttled Starlink satellite service this week, disrupting military operations. Elon Musk says the U.S. government, not his company, controls the military version of the network.
The dispute centers on Starshield, the secure variant of Starlink that SpaceX builds for government use. Serhii Beskrestnov, a technology adviser to Ukraine’s president, said a speed limit was introduced overnight on terminals in motion, a restriction that would hit drone and vehicle operations. These new restrictions caused abrupt connectivity losses during combat missions.
Musk wrote on X that Starshield systems are owned and controlled by the U.S. government, while Starlink is a commercial service owned by SpaceX. The Pentagon did not immediately respond to requests for comment. Senator Jeanne Shaheen, a member of the Armed Services and Foreign Relations committees, wrote on X that the restrictions on Ukraine’s access “must stop immediately.”
Poland, which pays for Ukrainian Starlink subscriptions, also objected. Its foreign minister, Radosław Sikorski, has clashed with Musk over the technology before. A separate report citing CBS News said U.S. officials told Ukraine that a system used to detect Russian missile launches failed because of “bad weather,” an explanation Ukrainian officials told reporters they did not believe.
The dispute comes as SpaceX is deepening its ties to the Pentagon. The Space Force has awarded the company a $2.29 billion fixed-price contract to build the Space Data Network Backbone, a Starshield-based layer meant to link missile-defense sensors and interceptors in near real time. It also won a $4.16 billion contract for satellites that track foreign aircraft and missiles, due by 2028. Both of which fall under Golden Dome, a program the Congressional Budget Office has estimated could cost $1.2 trillion over 20 years. Some officials have warned of dependence on a single vendor.
SpaceX went public in mid-June in a record $75 billion offering. In the quarter ending with the IPO, revenue rose about 92% to $7.8 billion, with Starlink contributing roughly $4.3 billion. Customers grew from 10.3 million to 12 million in three months. Shares peaked near $225 after the offering and had fallen to about $125 by early August, below the issue price. A fifth of SpaceX’s 2025 revenue came from the federal government, according to its filing.
Pentagon Offers Wolfspeed a $1.5 Billion Loan in Exchange for a Stake in the Company
The Pentagon’s Office of Strategic Capital has offered chipmaker Wolfspeed up to $1.5 billion in 30-year financing. In return, the government would receive warrants to buy up to 7.5% of the company. The offer, disclosed October 7, is a conditional commitment letter.
This is the latest example of the Pentagon taking equity-style positions in suppliers it considers strategically important. Wolfspeed makes silicon carbide and gallium nitride chips used in radar, electronic warfare and missile defense. The company emerged from Chapter 11 bankruptcy just over a year ago.
How the deal would work
The facility would be a senior secured loan drawn in up to four tranches. The first, $600 million, would pay off Wolfspeed’s first-lien notes due in 2030 and cover transaction costs. The remaining $900 million would come in up to three tranches of $200 million to $400 million. Those funds would go toward U.S. silicon carbide and gallium nitride production and radiation-hardened versions of its chips. The company would have 36 months to draw the money, and for the first five years it could add interest to the loan rather than pay cash.
The government’s warrants, split between a 5% and a 2.5% piece, would be issued as each tranche is funded rather than all at signing. According to the company’s SEC filing, the government would also get a non-voting board seat. The commitment is far from final. Wolfspeed’s filing lists due diligence, definitive agreements, and authorization or reauthorization from Congress. It also requires available appropriations and approval from the Office of Management and Budget, which the company says are beyond its control. Wolfspeed must also raise at least $750 million in new capital, secure acceptable customer purchase commitments, and win waivers from its existing lenders.
Wolfspeed filed for bankruptcy on June 30, 2025, and emerged on September 29, 2025, after cutting debt by about 70%. It still burned $380 million in free cash flow in the year to June 2026 and had $1.8 billion of debt against $1.09 billion in cash and short-term investments. Its market value is about $1.7 billion, roughly what the government is offering to lend. “SiC and GaN have critical national security applications,” CEO Robert Feurle said of the technologies.
Shares jumped as much as 27% in extended trading after the announcement. They gave back much of that gain, closing the next session down 1.1% at $31.02.
This is part of a larger pattern
Semafor reported in September that the Pentagon has negotiated equity or equivalents such as warrants in at least 10 companies since Deputy Secretary Steve Feinberg took office last year. The best-known is MP Materials, the rare-earth miner. The Pentagon bought $400 million of its preferred shares, a deal that could give it roughly a 15% stake, and added a $150 million loan. The administration also took a stake in Intel last year.
Semafor also reported that the White House helped the Pentagon explain the legal basis for the deals when the Pentagon’s top lawyer signaled that this may not be entirely legal. The Senate Armed Services Committee wants to give the Office of Strategic Capital the explicit authority to do this anyways though. Its 2027 defense bill would create a dedicated equity account with an initial $250 million, limited to critical minerals, materials, chemicals and batteries. Chairman Roger Wicker has also said the department needs to regularize the process and be more open with Congress. Whether Congress authorizes and funds the loan is the main open question remaining at the moment.
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The Pentagon has declared itself AI-first
At AUSA on Wednesday, Hegseth said the military will field drones in the millions and is seeking about $50 billion more to speed autonomous and robotic systems. The Autonomous Warfare Command is meant to bring AI, uncrewed systems and computing power to the battlefield. The Army followed with its own autonomy command, led by a three-star general. Congress hasn’t approved the $50 billion at the moment.
Frontier AI labs are now fixtures on the Pentagon’s classified networks, and Anthropic is on the outside:
On May 3 the Pentagon signed classified-network AI agreements with eight companies: OpenAI, Oracle, AWS, SpaceX, Google, NVIDIA, Reflection and Microsoft. Its stated condition is “any lawful use,” meaning no vendor-imposed limits. Anthropic refused to drop its bans on mass domestic surveillance and fully autonomous weapons, and Hegseth designated it a supply-chain risk in March. Last week, a federal appeals court sided 2-1 with the Pentagon on one legal basis for the label. A California judge had earlier blocked enforcement of a parallel designation, and that order remains in effect.
Compute is AI’s bottleneck, and the Pentagon is trying to buy its way out:
It requested $29.5 billion in FY27 for its “AI Arsenal,” which would buy AI supercomputers and build secure data centers. SpaceX has reportedly been pursuing a Pentagon AI compute deal. Officials have called compute their top concern as usage grows.
Private capital is flooding defense AI:
Anduril is in talks for about a $100 billion valuation, up from $61 billion. Shield AI is valued at $12.7 billion and Helsing at $18 billion. The Washington Times reports that Feinberg is also steering Office of Strategic Capital funds toward venture and private equity channels backing drone and AI companies.