Amazon Shareholder Lawsuit Claims Jeff Bezos Snubbed SpaceX for Satellite Contracts Due to Rivalry with Elon Musk
A lawsuit filed by the Cleveland Bakers and Teamsters Pension Fund on behalf of Amazon alleges that the company excluded SpaceX from valuable satellite launch contracts for its Project Kuiper system because of Jeff Bezos’ personal rivalry with Elon Musk. The lawsuit, filed in the Delaware Court of Chancery, accuses Bezos and other Amazon executives of breaching their fiduciary responsibilities by awarding contracts to rockets that have yet to launch and are behind schedule.
The lawsuit highlights the ongoing rivalry between Bezos and Musk, with screenshots of Musk’s taunts about Bezos’ space efforts at Amazon and his space company, Blue Origin. Last year, Amazon announced a major rocket deal, signing contracts with United Launch Alliance, Arianespace, and Bezos’ Blue Origin. The company expects to pay about $7.4 billion for launch services through 2028, with a significant portion going to Blue Origin.
The lawsuit claims that Amazon purposely excluded SpaceX, the leading rocket provider in the world, from its procurement process. SpaceX’s Falcon 9 rockets are priced comparatively lower at around $70 million per launch. The company is also known for its frequent launches, with an average of one launch every four days in 2023.
Amazon has rejected the claims made in the lawsuit, stating that they are without merit. Blue Origin has yet to provide a statement in response to the lawsuit.
Represented by Grant & Eisenhofer, the Cleveland Bakers and Teamsters Pension Fund alleges two counts of breach of fiduciary duty against Amazon’s leadership. The lawsuit accuses the company of failing to conduct proper analysis of the rocket launch market and approving contracts without adequately addressing Bezos’ conflict of interest.
The lawsuit also claims that discussions about launch contracts did not include SpaceX, and the Amazon audit committee did not receive updates on negotiations for nearly 18 months. Details about the contract values in question are redacted in the lawsuit.
CB&T alleges that the Amazon audit committee quickly approved the contracts with Blue Origin, ULA, and Arianespace without sufficient discussion or information.
The lawsuit criticizes the Amazon board for not seeking the help of SpaceX, stating that Bezos’ rivalry with Musk prevented him from considering the company as an option.
The lawsuit concludes by stating that the Amazon board’s actions have jeopardized the Kuiper program and put the company at risk. It accuses Bezos of prioritizing his pride over the success and well-being of the company.
Amazon and Blue Origin have yet to respond to the specific allegations in the lawsuit. The case will proceed in the Delaware Court of Chancery as CB&T seeks to hold Amazon’s leadership accountable for their alleged breach of fiduciary duty.