Jeff Bezos vs Elon Musk: Amazon Shareholder Snubs SpaceX as Alleged Personal Rivalry Continues

Quincy Jon, Tech Times 01 September 2023, 05:09 pm

The Cleveland Bakers and Teamsters Pension Fund (CB&T) filed a complaint on behalf of Amazon shareholders alleging that the tech giant purposefully disregarded SpaceX when granting lucrative satellite launch contracts because of a long-standing animosity between Amazon founder Jeff Bezos and SpaceX CEO Elon Musk.

The suit provides insight into the tense relationship between two of the most wealthy tech moguls in the world, who have been embroiled in a public spat over their separate space efforts for years.

Last year, Amazon announced the largest rocket agreement in commercial space history. According to CNBC, United Launch Alliance (ULA), Arianespace, and Jeff Bezos-owned Blue Origin signed launch contracts in this historic transaction. Amazon's annual shareholders meeting in May revealed a $7.4 billion launch services budget through 2028. Approximately $2.7 billion was allocated for Blue Origin.

Amazon Allegedly Snubbed SpaceX

CB&T's lawsuit argues that Amazon's executive chair, Jeff Bezos, CEO Andy Jassy, and numerous board members broke their fiduciary obligations while granting Project Kuiper mission contracts. These contracts concern three unlaunched rockets that are apparently years behind schedule.

In addition, the complaint claims that Amazon purposefully left SpaceX out of its procurement process despite the company being a prominent and affordable launch provider. According to CB&T, Bezos' personal rivalry with Elon Musk was the main reason for the exclusion of SpaceX.

The launch contracts for Project Kuiper were the second-largest capital investment in Amazon's history at the time, according to CB&T, a multi-employer pension fund. Amazon's largest deal is its 2017 $13.7 billion purchase of Whole Foods.

The lawsuit alleges that Amazon has paid over $1.7 billion to Project Kuiper's three launch service suppliers, including $585 million to Blue Origin. Amazon had not sent a prototype of its Kuiper satellite into orbit as of the lawsuit's filing.

Amazon denied the accusations in the lawsuit shortly after they were announced. A corporate spokesperson conveyed that the tech company looks forward to establishing that the charges "are completely without merit through the legal process."

An Ambitious Project That Rivals Starlink

Project Kuiper is a network of over 3,000 satellites that will be employed to provide broadband internet connectivity to rural and underdeveloped areas, according to Reuters. With this endeavor, Amazon directly challenges Elon Musk's SpaceX and its Starlink satellite internet project.

Amazon stated that Project Kuiper satellite mass manufacturing will start later this year, with beta testing for commercial clients scheduled for 2024. According to the FCC, Amazon has committed to launching half of its 3,236-satellite Kuiper satellite network by 2026.

The pension fund filed the lawsuit at Delaware's Court of Chancery, according to TechCrunch.