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The Street
The Street
Luc Olinga

Elon Musk Makes Big Promise to Ukraine Against Russia

Elon Musk is obsessed with the biggest threats to the world today. 

The serial entrepreneur has spent the past two weeks talking about the Russian war in Ukraine. 

Indeed, since Russia's invasion of Ukraine on Feb. 24, the CEO of Tesla (TSLA) has provided crucial aid to Ukrainians in the form of Starlink, which is the secure and independent satellite internet access service developed by its aerospace company SpaceX.

Starlink is used particularly by civilians in areas under attack by Russia and in areas where infrastructure has been destroyed. Government officials and armed forces employ the service on the ground because it's secure.

From Pressure ...

The company's satellites also are helping Ukrainian military drones destroy Russian tanks and army trucks. The drones are equipped with anti-tank grenades to be launched at targets.

Faced with Russian attacks against Ukrainian infrastructure, Starlink has become the only means of communication for the Ukrainian armed forces on the front.

"Starlink is the primary communications system of the Ukrainian army on the war front. If anyone else wants this job, please be my guest..." Musk posted on Twitter on Oct. 14.

"Starlink is only comms system still working at warfront – others all dead. Russia is actively trying to kill Starlink. To safeguard, SpaceX has diverted massive resources towards defense."

The Ukrainian authorities have confirmed the crucial role currently played by Starlink in this war, which also includes the messaging. Starlink allows the Ukrainian authorities to continue to have control over part of the narrative of this war, at a time when they are inflicting defeats on Russia in key regions of the country.

"Definitely @elonmusk is among the world's top private donors supporting Ukraine," Ukraine's vice prime minister and minister of digital transformation, Mykhailo Fedorov, said on Twitter on Oct. 14. "Starlink is an essential element of our critical infrastructure."

... To Big Announcement

A controversy over Starlink funding, however, erupted after revelations that Musk and SpaceX had asked the U.S. government through the Department of Defense to provide some funding for Starlink. The United States supports Ukraine militarily and logically via NATO. 

Musk and SpaceX felt that since Starlink had become an essential "military" tool in this war, it was up to the government to fund the portion of the service provided to Ukraine. They therefore threatened to cut the service if the Pentagon refused.

The billionaire put additional pressure on the White House and NATO by explaining that without public funding, Starlink would undoubtedly die.

"Russia is actively trying to kill Starlink," the tech tycoon warned on Oct. 14. "To safeguard, SpaceX has diverted massive resources towards defense. Even so, Starlink may still die."

But only a few hours after this warning, Musk has just made an about-face. He agreed to provide Starlink for free to Ukraine, even if the service causes financial loss to SpaceX.

"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," Musk announced on Twitter on October 15.

He did not explain what led him to drop his demands.

"I’m trying my hardest to de-escalate this situation and obviously failing," the serial entrepreneur said.

The announcement galvanized his fans on social networks who did not hesitate to point out that the billionaire's detractors and critics will continue to criticize him despite this good deed.

"No good deed goes unpunished," commented tech investor David Sacks, who is also Musk's friend.

"Even so, we should still do good deeds," Musk responded.

Providing Starlink in Ukraine "has cost SpaceX $80M & will exceed $100M by end of year," Musk said on Oct. 7. The figure could total $400 million for the next 12 months.

About 20,000 Starlink terminals have been shipped to Ukraine. They are provided and partially financed by SpaceX, USAid, Poland, the European Union and private companies, according to the Ukrainian state-run news agency Ukrinform.

While SpaceX is losing money providing this service to Ukraine, the move also gives Musk global exposure, rarely received by any other CEO of a company. 

The new announcement also allows the richest man in the world to move past the controversial peace plan he presented, on Oct. 3, to end the Russia-Ukraine war. This plan, which mirrors requests from Moscow, asked Ukraine to recognize as Russian territory its region of Crimea, annexed in 2014 by Russia.

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