Reports this week suggest Ukraine’s military satellite links were throttled with US involvement, though who ordered it is disputed.
The Wall Street Journal reported that Musk ordered the military version of Starlink slowed, leaving some Ukrainian attack and interceptor drones practically unusable. The Telegraph, citing four sources, reported that Musk proposed the cap and Trump approved it, clearing the way for the Defense Department to slow Starshield. The cap began on Oct. 14, after the administration urged Ukraine to stop striking Russian oil infrastructure, and Zelensky said he read it as a message from the American government. Musk says limits are decided by the US military and ultimately the president, while Trump and the White House deny involvement and some US officials say Musk acted alone. Whoever decided, a slowdown impedes Ukraine’s intelligence gathering, interceptor drones and long-range strikes.
As a result, Ukraine is now on the back foot, with a greater risk of losing territory.
Dependence on One Major Foreign Defence Provider
The episode shows the core risk of depending on one foreign provider for defence: infrastructure is leverage. Whoever controls a network can throttle it and affect other countries, whether through government policy, a commercial decision or one person’s discretion. The recipient rarely chooses the timing, and can be left unsure of the cause. Ukrainian officials were still trying to establish whether the restrictions were political or corporate, and a state cannot plan its war plans around a decision it cannot attribute.
Dependence also narrows policy options. A country that needs a supplier or another country’s goodwill will weigh that goodwill in every decision, including military ones. Alliances do not remove the problem, because they shift with leaders, elections and domestic politics, and supply guarantees seldom survive a falling-out. Lock-in compounds it: once drones, targeting and logistics are built around one system, switching is slow and costly.
Splitting military suppliers from multiple countriese addresses these weaknesses. Redundancy means that if one source is cut, delayed or degraded, others keep the capability running. Competing vendors give a buyer room to negotiate on price, terms and technology transfer. No single capital can use a supply line as a pressure point. Sanctions, export controls and factory disruptions tend to hit one supplier at a time, not all of them at once. Several countries already work this way. Poland has bought from both the US and South Korea. Singapore buys its main defence heavily from the USA, but its ancillary and small arms fields American, German, French and Israeli systems across different domains.
While Ukraine had some diversification, it remained too heavily concentrated on US technology and equipment, and now faces the risk of a worse outcome in the war.
A reminder for us as well, not to concentrate our holdings in one or two companies *also a reminder of me to avoid adding to my US REITs too, despite their high yield :)
How it Affects Investment
Heavy reliance on one foreign country for defence is a huge risk factor in the current climate. Investors should demand a premium for any country whose defence depends on a single supplier, especially the USA; its current head of state is unpredictable, which means procurement can be delayed or curtailed, leaving a country without sufficient defence infrastructure to protect itself. Investors should be aware of this risk, and weigh it more heavily.
The country risk of investing in a country which has too much dependence on USA is now serious and damning for investors. We should demand a higher risk premieum for such countries.
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