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SpaceX’s Starship Crashes Into The Indian Ocean: What Are The Major Setbacks And Who Will Bear The Financial Burden?

The Starship program of SpaceX faced another major setback on Wednesday, when its Starship upper stage crashed into the Indian Ocean after the control was lost by the company nearly 30 minutes into its ninth test flight.

The Starship program of SpaceX faced another major setback on Wednesday, when its Starship upper stage crashed into the Indian Ocean after the control was lost by the company nearly 30 minutes into its ninth test flight.

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This Mission was started from Starbase in Texas, and  it was designed to explain the other areas of the starship’s orbital and reentry capabilities, and the upper stage was to have a controlled splashdown halfway around the globe.

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It is a very big thing not to notice a Starship exploding mid-air or breaking into pieces during descent. For many people, all these events, apart from how SpaceX talks about it, represent a major setback for achieving a fully reusable spaceflight or even the thought of having the colonization of Mars.

In between all this, Elon Musk and his team at SpaceX often highlight the “rapid iterative development” and “learning from failure” mantra, but their constant failures and destruction of test flights show that there is some technical hurdle that needs to be fixed. All these events, minus the data they provide, lead to a loss of many things, be it money, resources, manpower, and most importantly, time.

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The public, or even some people in the space industry, view this as an unplanned move. All this has been seen as a reminder of the amount of technical complexities that are involved in building a spacecraft or a starship. The challenges begin with designing engines that are trustworthy while being reusable, making materials that can bear extreme temperatures of reentry, and the biggest challenge is to smoothly land such a gigantic vehicle.

Apart from this, these setbacks have more implications than just this. For example, NASA is very much dependent on Starship for its Artemis Program, mostly for landing its astronauts on the moon. All these delays and failures in the development of the starship program have directly impacted NASA’s timeline, and this could lead to cost issues and government pressure. Other customers or investors who might want to invest would not want to do it now due to the constant failures, even if SpaceX has a big or positive name.  

If we talk about who will bear the financial burden, then it will be SpaceX itself. SpaceX is self-funding most of the Starship’s iterative development, absorbing the cost of each prototype and test flight as a necessary investment in achieving its overarching goals of making humanity multi-planetary. Additionally, SpaceX has secured significant private investment rounds, with investors backing Elon Musk’s long-term vision. While NASA has awarded SpaceX a substantial contract, nearly $2.9 billion, for the Human Landing System (HLS) variant of Starship for the Artemis lunar program, this funding is specifically tied to the lunar lander’s development and specific milestones, rather than the entire Starship program.

The “fail fast” philosophy will be effective here, but only for certain points, because it also carries some risks. A major failure could lead to a more firm and harsh regulatory oversight, which will eventually slow down the pace of testing. The public perception, on the other hand, can be affected by all these frequent failures. There is a very thin line between a company that learns from its mistakes and one that again and again makes the same mistakes.

In a nutshell, every “rapid unscheduled disassembly” provides useful data, but it also represents a step back in the immediate goal of attaining a fully functional and reliable Starship. It shows that the technical challenges are more than just what it shows at its initial stage, which needs to be dealt with as soon as possible.

First published on: May 28, 2025 12:59 PM IST


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