SpaceX is about to make history and surpass NASA. Yes, what you are reading is real, its satellite internet business, Starlink, has grown so much that it is already close to NASA’s annual budget!! The same NASA that, by the way, was one of its big supporters in the beginning.
But of course, there are facts and they must be given, and while Musk’s company breaks records and launches satellites continuously, it is still not paying anywhere near what it should in taxes… Of course, it has gone more than 20 years without paying taxes! That way anyone could…
What is SpaceX?
It is a private space exploration company founded in 2002 by Elon Musk, yes, the same Musk from Tesla. It manufactures reusable rockets, sends satellites, and transports cargo and astronauts to the International Space Station.
Starlink: the money machine
What started as a somewhat futuristic idea has ended up being the goose that lays the golden eggs. Starlink already has more than 6 million subscribers and is generating more money than the rocket division. Just this year, it is expected to bill 15.5 billion dollars. To give you an idea, NASA plans to have 18.8 billion in 2026.
That has boosted the valuation of SpaceX, which is already around 350 billion. We are talking about one of the most valuable private companies in the world. And it does not look like this is going to stop!
A private company… funded with public money
Of course, we must recap because SpaceX did not get where it is only because of Elon Musk’s talent or the brilliant ideas he had in 2002. The truth is that its growth is largely due to public contracts, especially from NASA and the Department of Defense, so it has grown thanks to all Americans.
According to data from the Washington Post, Musk’s companies have received so far 38 billion dollars in subsidies, loans, and federal contracts. In 2020, SpaceX obtained 84% of its revenue from public funds. In 2021, it was still at 76%!
Without that initial boost, all this “private success” probably would not exist.
The other engineering: paying the minimum in taxes
Then there is the tax issue. An investigation by the New York Times revealed that, until 2021, SpaceX had accumulated 5.4 billion in tax losses. And that has a trick because in the United States, losses can be used to offset future profits. That is, you pay less tax even if you are earning billions.
The play became even more profitable after a Trump reform in 2017, which eliminated the time limit to apply those deductions. So now SpaceX can carry those losses forward as long as it wants, reducing its tax bill for years. And legally.
About to surpass NASA
While we see how the government wants to slow down NASA’s missions and work, a private company that has grown thanks to public aid is about to manage more resources than the very space agency that supported it at the beginning… SpaceX is winning the bets while NASA has fewer and fewer resources…
Innovation or bargain?
All this has generated a big debate. For some, it is the perfect example of how private initiative can be more efficient and accelerate space exploration. For others, it is the reflection of a system that rewards those who have the most, even if they grew with public support.
What is clear is that Starlink has changed the rules. And SpaceX is no longer just a company that launches rockets: it is a heavyweight player in the world economy. And it does so playing with an advantage.