New Zealand testing of Elon Musk's Starshield 'significant', US expert says | RNZ News

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Phil Pennington, Reporter

phil.pennington@rnz.co.nz

SpaceX says its Starshield system uses "high-assurance cryptographic capability to host classified payloads and process data securely".<br>Photo: SpaceX

A US aerospace analyst says it is significant that New Zealand has begun testing Elon Musk's Starshield military satellite communications system.

In response to RNZ inquiries, the NZ Defence Force said it was testing Starshield to see what use it could be.

Clayton Swope, deputy director of the Aerospace Security Project at the Center for Strategic and International Studies in Washington DC said it was the first time he had heard of Starshield being used outside the US.

"To me this suggests that New Zealand is in an elite upper echelon in the eyes of the Pentagon, in the eyes of the US.

"This is a capability that is going to be critical to modern defence and warfighting in the future," said Swope on Wednesday.

Overnight the Reuters news agency reported Britain had begun using Starshield - based on two undisclosed sources - and had shifted operational military traffic to the network around the beginning of this year, though neither the UK defence ministry or Starshield operator SpaceX would comment.

Musk's nonclassified satellite system Starlink has been used by Ukraine in the war with Russia and by other militaries in Europe. The NZDF also used it, for instance, with its sea-surface Bluebottle drones.

But until now the higher-security, higher-cost Starshield was thought to be for the US government and its national security.

"Elon had said this is a capability for the US government, that Starshield is for the US government," Swope said.

"There was no indication ... that there were other customers that could potentially be using it."

Clayton Swope is deputy director of the Aerospace Security Project at the Center for Strategic and International Studies in Washington DC.<br>Photo: Supplied

'Raised the price'

The NZDF put a business case for Starshield to the government in December about the time that Reuters reported the UK began using the network.

Starshield's development has been largely secret. Analysts believe it offers encrypted laser communications between satellites at a higher security level than Starlink.

Musk, in an X post last week in response to Reuters reporting of a dispute between his company SpaceX and the Pentagon over costs, indicated Starshield could be used to guide US "suicide drones" in the Iran war, and that Starlink had been used this way "incorrectly".

Almost everything you’re saying is false and simply copying fake news from other accounts.

There is a US government arm of SpaceX called Starshield, which has a different set of satellites than Starlink, which is for civilian use.

The company that makes the suicide drones…<br>— Elon Musk (@elonmusk) May 26, 2026

"Last month, Reuters reported that SpaceX had raised the price charged to the Pentagon for Starlink services used to guide kamikaze drones in operations against Iran fivefold. Musk said the increase reflected the use of ​Starlink rather than Starshield, which he said should have been used," Reuters reported on Wednesday.

'Good thing for New Zealand'

Swope said New Zealand using Starshield's global coverage made sense in a region as critical as the Indo-Pacific.

"Like it or not, Elon Musk and SpaceX are on the cutting edge of those technologies and having access to that is the good thing for New Zealand and for the allied partnership, the long-term partnership between New Zealand and the United States."

US Secretary of War Pete Hegseth at the weekend accused New Zealand of "free-loading" on defence.

Use of Starshield might add to New Zealand's 'plus'-side ledger with Washington.

However, it remained unclear who actually owned the Starshield satellites as it might still be SpaceX, Swope said.

Musk though has called Starshield an "arm" of the US government, and the NZDF had to sign a deed of indemnity with the US government ahead of its tests.

Dependency downside

Swope said the downside of moving this way was dependency.

"If there is a downside to this arrangement [it] is that New Zealand is tied to a service and to equipment that it does not own," he said.

"And ultimately, depending on how the political winds could shift, which you can never really anticipate, that service could be shut off and there'd be nothing New Zealand could do about it."

The Iran drones dispute reported by Reuters further illustrates this.

Swope for his part gave examples of defence or security projects or services being shut off, or threatened with that, at Google, Microsoft and SpaceX in recent years.

"You look at how the [US] government essentially just asked companies that do satellite imagery not to provide imagery of what's happening in the Middle East,...