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Elon Musk's Starlink mints money and has become a geopolitical power tool. No wonder Amazon is splurging on satellites.
- Amazon continues to invest in Project Kuiper, a satellite project that could rival Elon Musk's Starlink, despite cost-cutting measures elsewhere.
- Project Kuiper aims to launch a constellation of internet-beaming satellites, highlighting massive profit potential and a desire for strategic independence from Musk.
- Starlink, SpaceX's satellite internet venture, has seen rapid growth, with projected revenue of $12.3 billion for 2025 and an impressive EBITDA margin of 61%.
- Kuiper aims to tap into the $1 trillion total addressable market in terrestrial telecom and broadband services, providing Amazon with a potential high-margin business opportunity.
- With only limited satellite communication spectrum available in space, Kuiper is positioned to be a significant competitor to Starlink.
- Amazon's satellite ambitions also stem from a need for autonomy, as it aims to reduce reliance on Musk's Starlink for broadband access, crucial for its cloud business AWS.
- By owning the satellite infrastructure, Amazon can control quality, pricing, and reach, reducing dependencies on third-party providers and providing a direct highway to the cloud.
- Project Kuiper is strategically positioned to unlock billion-dollar upside for Amazon while ensuring independence from potential geopolitical and commercial risks.
- As Starlink paves the way and Kuiper scales its constellation, Amazon's investment in satellite infrastructure appears to be a calculated and savvy move.
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