Shareholders of a pension fund that includes Amazon stock have filed a lawsuit against the company, its founder Jeff Bezos, and its board of directors. The lawsuit claims that Amazon breached its fiduciary duty in acquiring launch services for the Project Kuiper megaconstellation without considering SpaceX and its Falcon 9 rocket. The plaintiffs argue that SpaceX was the most cost-effective and readily available option for launching half of Amazon’s constellation by the 2026 deadline. However, the lawsuit alleges that Amazon’s decision was influenced by the personal rivalry between Elon Musk, the founder of SpaceX, and Jeff Bezos, who owns Blue Origin, a competing rocket company.
The lawsuit centers around Amazon’s mega-award in 2022 for launch contracts with Blue Origin, United Launch Alliance, and Arianespace. This deal, valued as the second-largest capital expenditure in Amazon’s history, provided the company with an extraordinary amount of launch capacity over the next five years. The lawsuit claims that Amazon’s board of directors failed to consider SpaceX as a potential launch contractor, instead choosing companies that would benefit Bezos personally. The ongoing delays to Blue Origin’s New Glenn rocket and United Launch Alliance’s Vulcan booster are also cited as concerns that could jeopardize the entire Kuiper program.
Amazon has responded to the lawsuit, stating that the claims are without merit. The company maintains that its decision not to consider SpaceX was based on strategic considerations and not influenced by personal rivalries. Project Kuiper aims to develop a large broadband satellite Internet constellation, and Amazon is required to launch half of its planned satellites by July 2026.
The lawsuit highlights the tensions between Musk and Bezos in the space community but raises questions about the legal grounds for the claims. Amazon argues that by not funding its largest competitor in the space-based Internet business, it made a strategic decision to support its own development and improvement of the Kuiper program. The core issue in the lawsuit is whether Amazon’s directors gave due consideration to all relevant factors in their decision-making process.
The plaintiffs seek damages and attorney’s fees as relief. The outcome of the lawsuit will determine whether Amazon’s procurement process for launch services for Project Kuiper was in compliance with its fiduciary duties.