Google Invests $1 Billion in SpaceX

In Business and Currency by Continental StaffLeave a Comment

Late last month it was confirmed that Google made a massive $1 billion investment in SpaceX. Partnering with Fidelity Investments, Google owns 10% of SpaceX valuing the company at a cool $10 billion. It’s believed that Google’s investment was made with the intention of developing a global wireless internet service – but other tech giants like Virgin and Qualcomm are also interested. A new type of space race is starting and you could be the biggest beneficiary.

Google and SpaceX

Google has long sought to develop a global internet service but rather than satellites, past efforts focused on weather balloons and unmanned solar powered drones. Unfortunately the company found limited success and shut down the program. It is believed that Google will now partner with SpaceX to utilise satellite technology to spread the internet across the globe.

So far, SpaceX has primarily focused on building rockets and spacecraft. It was the first private company to send a spacecraft into orbit and return it safely to earth. Long term the company hopes to slash the cost of space travel by developing reusable spacecraft and rockets. Google’s investment will build on the expertise and reputation that SpaceX has developed and apply it to creating a global satellite internet.

Global Communication

According to Google, 2/3 of the world does currently not have internet access. Elon Musk, founder of SpaceX, hopes to see that his new cooperation with Google will allow the company to become the “primary means of long distance internet traffic” in every corner of the world. It is an ambitious goal which analysts suggest could take up to five years and $10-15 billion to accomplish.

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A Modern Space Race

Google and SpaceX are not the only companies hoping to become the first truly global internet providers – they face stiff competition. Greg Wyler – who was in charge of Google’s project – has since found success with his own global communications venture OneWeb Ltd. Wyler’s company has found eager investors in Virgin and Qualcomm. Virgin, owned by Richard Branson, also owns Virgin Galactic which is locked in a private space race with SpaceX. OneWeb intends to launch about 650 ‘micro satellites’ to beam high-speed internet across the world. OneWeb’s plan is priced at a modest $1.5-2 billion which is a bargain compared to the $10-15 billion that SpaceX and Google may have to spend.

Virgin’s official website boasts “We have the biggest order ever for putting satellites into space. By the time our second constellation is developed, the company will have launched more satellites than there currently are in the sky.”

OneWeb has a leg up

OneWeb has another serious advantage over Google and SpaceX. The company already owns the rights to the part of the radio spectrum necessary to transmit data to earth. Branson has urged a truce of sorts by insisting that OneWeb Ltd would not cede any of its radio spectrum to competitors but would welcome investment and cooperation from competitors. Musk has defiantly insisted that his company would be exploring alternatives including the use of lasers to transmit information and would not need to use OneWeb’s radio spectrum.

Facebook’s Mark Zuckerberg has also expressed his intent to develop a global communications network but is primarily looking at balloons, drones and other more terrestrial options.

Last word

Regardless of who wins the race to become the first global internet provider, it will result in cheaper, faster internet for everyone. More importantly billions of people with no access to the internet will be able to enter the information age for the first time.

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