In a short period of time, Starlink has taken three actions that demonstrate the company’s growing market power. The company’s market power will be strengthened with the impending merger between SpaceX and Elon Musk’s AI company, xAI. Analysts have estimated the combined companies could garner a market value of over $1 trillion.

The first move from Starlink came on January 15 when the company updated its user Privacy Policy. The revised terms say that, unless a customer opts out, Starlink can use user data “to train our machine learning or artificial intelligence models”, and that user data could be shared with third-party collaborators without providing more details to customers.

This should be disturbing to customers, because this doesn’t just mean sharing details of emails. In today’s broadband world, it could mean sharing video images, voice prints, and the giant amount of private information that an ISP can learn about its customers if it is looking.

Starlink’s second big move came when it sent a document to State Broadband Offices, where Starlink is a tentative winner of BEAD grants. Starlink asked that LEO providers be excused from many of the BEAD obligations that will apply to other grant winners. The Starlink communication included a veiled threat that the company could pull out of BEAD if SBOs don’t meet its suggested terms.

Among the suggested changes, Starlink payments would not be linked to adding subscribers, and it would get 50% of BEAD funding up front and the rest over a specified schedule. Starlink would not have to provide financial reporting or provide any documentation about how it spends the grant funding. Starlink wants to be excused from speed test requirements since it can’t guarantee that subscribers have installed the satellite receiver properly. Starlink also wants to be excused from insurance and labor requirements.

On January 30, SpaceX asked the FCC for the ability to launch 1 million new satellites to create a giant orbital data center for AI. These satellites would be placed between 310 and 1,240 miles above Earth, in narrow 30-mile bands that would leave room to deconflict with other companies with similar goals. SpaceX says the giant satellite constellation is needed as the first step for humanity to become a Kardashev II-level civilization that fully harnesses the Sun’s power, while also providing enough AI capacity to serve billions of people. FYI, a Kardashev II-level civilization is one that fully harnesses the total energy output from its parent star. SpaceX says putting data centers in space is the most efficient way to meet the growing energy demands of AI data centers.

The constellation would use laser communications between satellites and would communicate back to Earth using Starlink’s current broadband constellation. SpaceX says it could launch the data center satellites at a rapid pace using its new Starship launch vehicle.

Announcing these three things within a month shows a company that is feeling emboldened enough by market power to act as it wishes. If a terrestrial ISP openly said it would use customer data to train AI, it would risk being shunned in the market, but Starlink operates in many places where there are no other competitive options. I wonder how safe Starlink customers will feel about their data, even if they opt out of sharing it with Starlink.

It’s going to be interesting to see how State Broadband Offices react to the Starlink demand for easier BEAD terms. Many of the SBOs didn’t want to make big awards to LEO satellite providers, and were coerced by NTIA to do so with the Benefit of the Bargain rules. It’s not unimaginable that some States will outright reject Starlink’s request, which could lead to some interesting fights between States and NTIA.

The request to launch 1 million satellites could be a stunt to boost interest in the upcoming IPO and merger. Or it could be real. This FCC clearly favors satellite technology, but even for them, a request to launch 1 million satellites has to be an extreme request.