2 ms·

The Coming SpaceX Scam

anovikov 7mo ago
SpaceX has a giant moat in the launch business. They launch well... almost everything that goes up there, and can do it at truly unbeatable costs - and in a market that is protected from competition by ITAR. Within US, their advantage is so big, no one will even bother to try. It will only get bigger once they have Starship. That advantage isn't so important on its own - launch business is small and will probably not get much bigger - but it gives them an effective monopoly on deciding which space system get created and which don't - because they can always beat any possible competition just by launching their version much cheaper. That is a truly enviable position one can only compare to Standard Oil in its best days - because of that private deal with railways they had - except in this case this is literally the same business.
- ben_w 7mo ago
  I don't see how ITAR is critical today. Before SpaceX demonstrated any successes, sure, but simply by following SpaceX's example about the existence of low-hanging fruit there's now a lot of other companies around the world who hire equally smart people to solve the same problems. Not only has China demonstrated they're quite capable of putting out clones, Rocket Labs exists and launches stuff and that was originally a New Zealand company. Even here in Europe, last trade fare I went to had a 3D printed rocket engine on even one of the smaller stands. The other problems of course is Musk himself, both because he's directly aggravating his own employees[0], and the Democrats (who, in the absence of a dictatorship, can be expected to regain government control in the not too distant future), and also a lot of non-US politicians (the list of nations he's aggravated includes all of his 3 citizenships but also far more besides) and phrases like "security risk" are getting thrown around. [0] https://www.lawcommentary.com/articles/nine-spacex-workers-published-an-open-letter-about-elon-musks-insults-sexual-tweets-then-they-were-fired-now-theyre-fighting-back-alleging-federal-laws-were-broken https://www.lawcommentary.com/articles/nine-spacex-workers-p...
  - anovikov 7mo ago
    But the trick is US market. For everything pertaining to tech, whatever happens outside of US is a rounding error. And ITAR protects US market from foreign competition - while in the US, no one could try beating SpaceX in launch costs.
    - ben_w 7mo ago
      > For everything pertaining to tech, whatever happens outside of US is a rounding error. Tech? That's a very broad domain, do you want to be more specific? Like, hardware is mostly China and Taiwan, IT services were a strength of India but IDK what's happening now with AI, etc. But as a broad brush, "tech" is all over the place in every industrialised nation, so it's going to be more like 25-35% USA. But even in the USA, I don't accept "no one could try beating SpaceX in launch costs", for the same reason SpaceX got as good as it did as quickly as it did. It's not a unique magic artefact, but rather science and engineering. And of course, new market + legal prohibitions just means opportunities for every other nation to be the place (say, all the chips are made in Taiwan, though obviously they may have their own opinions about exports to China) to go for everyone who just wants a commercial satellite up in orbit, and when the interesting tech isn't from the US in the first place, no export control by the USA can stop that.
      - anovikov 7mo ago
        Competing with SpaceX is about as hard as competing with Boeing on passenger planes - except Boeing is also a corrupt, disorganised wreck and SpaceX isn't. And unlike Boeing, SpaceX is also an airline, and it's also a passenger. Build some competitive product and SpaceX will refuse to launch it - and launching it with anyone else will be extremely expensive and also just impossible due to their low capacity and scheduling years in advance. Try building launch competition and SpaceX will easily undercut your prices because they don't even need launch revenue to succeed anymore. Try building both... and you will never get enough qualified engineers, know-how, and funding, just because no one will fund a copy of Boeing(plus a lot of other things), or Intel. And it is already a thing a lot more complex than Boeing or Intel.

SpaceX has a giant moat in the launch business. They launch well... almost everything that goes up there, and can do it at truly unbeatable costs - and in a market that is protected from competition by ITAR. Within US, their advantage is so big, no one will even bother to try. It will only get bigger once they have Starship. That advantage isn't so important on its own - launch business is small and will probably not get much bigger - but it gives them an effective monopoly on deciding which space system get created and which don't - because they can always beat any possible competition just by launching their version much cheaper. That is a truly enviable position one can only compare to Standard Oil in its best days - because of that private deal with railways they had - except in this case this is literally the same business.

ben_w 7mo ago
I don't see how ITAR is critical today. Before SpaceX demonstrated any successes, sure, but simply by following SpaceX's example about the existence of low-hanging fruit there's now a lot of other companies around the world who hire equally smart people to solve the same problems. Not only has China demonstrated they're quite capable of putting out clones, Rocket Labs exists and launches stuff and that was originally a New Zealand company. Even here in Europe, last trade fare I went to had a 3D printed rocket engine on even one of the smaller stands. The other problems of course is Musk himself, both because he's directly aggravating his own employees[0], and the Democrats (who, in the absence of a dictatorship, can be expected to regain government control in the not too distant future), and also a lot of non-US politicians (the list of nations he's aggravated includes all of his 3 citizenships but also far more besides) and phrases like "security risk" are getting thrown around. [0] https://www.lawcommentary.com/articles/nine-spacex-workers-published-an-open-letter-about-elon-musks-insults-sexual-tweets-then-they-were-fired-now-theyre-fighting-back-alleging-federal-laws-were-broken https://www.lawcommentary.com/articles/nine-spacex-workers-p...
- anovikov 7mo ago
  But the trick is US market. For everything pertaining to tech, whatever happens outside of US is a rounding error. And ITAR protects US market from foreign competition - while in the US, no one could try beating SpaceX in launch costs.
  - ben_w 7mo ago
    > For everything pertaining to tech, whatever happens outside of US is a rounding error. Tech? That's a very broad domain, do you want to be more specific? Like, hardware is mostly China and Taiwan, IT services were a strength of India but IDK what's happening now with AI, etc. But as a broad brush, "tech" is all over the place in every industrialised nation, so it's going to be more like 25-35% USA. But even in the USA, I don't accept "no one could try beating SpaceX in launch costs", for the same reason SpaceX got as good as it did as quickly as it did. It's not a unique magic artefact, but rather science and engineering. And of course, new market + legal prohibitions just means opportunities for every other nation to be the place (say, all the chips are made in Taiwan, though obviously they may have their own opinions about exports to China) to go for everyone who just wants a commercial satellite up in orbit, and when the interesting tech isn't from the US in the first place, no export control by the USA can stop that.
    - anovikov 7mo ago
      Competing with SpaceX is about as hard as competing with Boeing on passenger planes - except Boeing is also a corrupt, disorganised wreck and SpaceX isn't. And unlike Boeing, SpaceX is also an airline, and it's also a passenger. Build some competitive product and SpaceX will refuse to launch it - and launching it with anyone else will be extremely expensive and also just impossible due to their low capacity and scheduling years in advance. Try building launch competition and SpaceX will easily undercut your prices because they don't even need launch revenue to succeed anymore. Try building both... and you will never get enough qualified engineers, know-how, and funding, just because no one will fund a copy of Boeing(plus a lot of other things), or Intel. And it is already a thing a lot more complex than Boeing or Intel.