Starlink slowdown in Ukraine increases Musk’s business risks

In recent days, the White House and Elon Musk have exchanged conflicting rhetoric about suspending Starlink service to Ukraine in a fog of confusion. Musk posted on

The Wall Street Journal now reports that “some U.S. officials say Musk acted unilaterally and that Trump did not specifically order retaliation against Ukraine,” citing unnamed sources. And this, even though he assured last year that he “would never do such a thing”.

Regardless of who is right, the alleged action raises legitimate questions about the risks of doing business with the richest man on the planet.

Some critics and commentators are quick to blame Musk, who has long been one of their favorite targets of anger, with critics claiming that Elon Musk is the puppeteer behind the throne and the first to realize the government control aspirations of many private business leaders in American history, such as William Randolph Hearst, Marc Hanna and JP Morgan. The Musk portrayed by these critics looks like the 19^th Cornelius Vanderbilt, railroad tycoon of the century, reportedly quipped: “the law? What do I care about the law? Don’t I have the power? »

But in rushing to place blame on Musk alone, these critics risk missing the reality of what really happened with the suspension of Starlink service to Ukraine – while also being right about the unique risks of any company dealing with Musk. And here’s why.

Musk’s priorities are his business rather than his politics. And his business interests must be fully aligned with those of the White House, given Musk’s companies’ unique reliance on the federal government in multiple mediums.

About a fifth of SpaceX’s total revenue comes directly from U.S. federal agencies, including NASA and the Department of Defense, in addition to EspaceXSatellites are solely dependent on federal regulatory approvals.

Additionally, all defense contractors have their foreign sales controlled to some extent by the White House and Congress – so the development of Patriot missiles is driven by the White House, not their manufacturer. Raytheon; and sales of THAAD missiles and F-35 fighters are determined by decisions of the White House and Congress, not their manufacturer, Lockheed-Martin. And the latest news this week that Musk is considering a merger Tesla and SpaceX into one “Elon Inc,” as some call it, means it will need regulatory approval from the federal government for this mega-merger.

At the end of the day, Elon Musk isn’t the strongest man in the world – he’s still Donald Trump, President of the United States.

This entire episode serves as a powerful reminder to every company of the unique perils and risks of a relationship with Musk. After all, every business leader values ​​certainty. There is nothing more sacrosanct in business than a contract or agreement to provide goods and services. But every Musk business partner must think that certainty may not be possible when dealing with the richest person in the world.

Every company should at least now consider, as part of standard risk management, how Musk could possibly limit vital Starlink service despite previous contractual agreements. For example, just recently, Musk publicly chastised Delta’s CEO in a blistering post on X when the airline didn’t partner with Starlink to provide Wi-Fi on Delta flights. United, its Delta rival, has a partnership with Starlink, but it must now consider the uncomfortable prospect that Starlink could be throttled if it somehow attracts Musk’s ire.

The biggest winner in this saga could be Jeff Bezos’ Blue Origin, which just raised $10 billion in a successful fundraising round, valuing it at $130 billion. Other SpaceX competitors stand to benefit as customers – ranging from foreign governments to corporations – work to diversify their supply chain risks away from the near-monopoly Starlink currently holds in the space market.

Markets don’t like any monopoly, but especially if it’s unreliable, and competitors like Blue Origin don’t need to beat SpaceX technologically to take share; they just have to offer what Musk cannot, which is certainty.

So, regardless of what actually happened with the suspension of Starlink’s service to Ukraine, Musk may now face customer diversification, moving away from his complete reliance on SpaceX.

Jeffrey Sonnenfeld is senior associate dean for leadership studies and the Lester Crown Professor of Management Practice at the Yale School of Management, as well as a CNBC contributor. He is the New York Times bestselling author of ten books, including most recently, Trump’s Ten Commandments (Worth Books/Simon & Schuster), and the upcoming When Machines Act: The Promise and Peril of Our Agentic AI Future (MIT Press/Penguin Random House).

Steven Tian is research director at the Yale Chief Executive Leadership Institute.