By Geoffrey Smith
Investing.com -- Elon Musk's SpaceX has told the Pentagon that it can no longer afford to subsidize the use of its satellite-supported Internet service Starlink by Ukraine, according to CNN.
The broadcaster cited a collection of documents sent to the Department of Defense last month, around the time that Ukrainian forces started to report outages of the Starlink service in the territories they were recapturing from Russia. The outages badly disrupted Ukraine's advance, according to various reports.
The news underlines the cost of a high-profile gesture of support made by Musk at the start of the war in February, and sheds light on Musk's recent and controversial efforts to broker peace there by pressing it to give up territory. Musk said last week SpaceX will have spent $100 million on subsidizing Starlink's use by the end of the year.
Musk's financial challenges are mounting after he succumbed to legal pressure from Twitter (NYSE:TWTR) to complete his $44 billion acquisition of the social media company, a deal struck when the overall stock market - and Tesla (NASDAQ:TSLA) stock, which Musk will have to sell to fund the purchase - was far above its current level.
“We are not in a position to further donate terminals to Ukraine, or fund the existing terminals for an indefinite period of time,” CNN quoted SpaceX’s director of government sales as writing in a letter to the Pentagon in September.
CNN said the letter also requested that the Pentagon take over funding for Ukraine’s government and military use of Starlink, arguing that it would cost more than $120 million for the rest of the year and could cost as much as $400 million over the next 12 months. The documents cited by CNN showed that Ukraine's top general Valerii Zaluzhniy had asked for a further 8,000 Starlink terminals in July.
According to CNN, over 80% of the Starlink terminals used by Ukraine in recent months have been funded by outside parties, notably the Polish government and crowdfunding operations.