Elon Musk, Jeff Bezos and Richard Branson race to establish a space presence. But what rights and obligations come with that?
It’s not clear what the rules are, even though the $460 billion aerospace industry is growing rapidly.
Virgin Galactic, by Mr. Branson-founded space tourism company, announced Thursday that it would launch its first commercial spaceflight this month, alongside Mr. Bezos and SpaceX from Mr. Musk to send passengers into space with tickets. But travel is just an emerging branch of the industry, fueled mostly by US and international government contracts. The sector includes companies in the fields of satellites and communications, solar energy, manufacturing and even mining. One, Orbital Assembly, hopes to open a luxury alien hotel by 2025.
Citigroup analysts predict that aerospace companies will reach $1 trillion in revenue by 2040.
All this activity raises legal questions.
In theory, space belongs to everyone. In 1967, as the United States and the Soviet Union were building up their nuclear arsenals, the United Nations signed a treaty that says no country can claim territory in space. “We didn’t want to take the Cold War into space,” Michelle Hanlon, co-director of the air and space law program at the University of Mississippi, told DealBook.
Since then, a UN space commission has drafted four more treaties and five sets of principles in areas such as arms control and liability for damage caused by space objects. All are based on the idea that space “should be devoted to improving the well-being of all countries and humanity, with an emphasis on promoting international cooperation.”
That perspective is about to collide with reality, said Curt Blake, a space attorney at Wilson Sonsini Goodrich & Rosati and the former CEO of an aerospace start-up. “People have done such a bad job of regulating everything of public interest, like the oceans and the air,” he said. “Are we going to take better care of the moon?”
An upcoming test is a race between China and the United States to get to the moon’s poles to mine water, which could make it possible to produce fuel in space. There is little understanding of what will happen when they both get there.
“Will they live on different sides or dot their bases?” asked Mrs. Hanlon. “We don’t know because we have these regulatory gaps.”
Another possible conflict is brewing 170 million pieces of rubble such as satellites left in Earth’s orbit, known as “space junk,” because their buildup makes exploration more difficult and dangerous. Since no one owns space, it is not always clear whose responsibility it is to clean it up. In September, the Federal Communications Commission approved rules requiring companies to take down non-functioning satellites within five years, instead of 25 years.
Lawyers are grappling with issues like this at meetings such as The Hague Space Diplomacy Symposium this week at Leiden University, where collaboration was key amid rising geopolitical tensions and competition.
The US government has deliberately left some gaps. In 2004, Congress imposed a moratorium on safety regulations for commercial space launches, essentially a free pass or “learning period,” which expires in October. It has taken so long because there has not been enough development to base new rules on. In April, a report from the RAND Corporation recommended against renewing, and the Federal Aviation Administration is planning more oversight.
Business leaders warn against creating so much regulation that it pushes innovation abroad, while acknowledging that we need regulation. And futurists, of course, have a long and wide view. Many are concerned that we will exploit resources in space before we can “access the infinity of the universe,” as Ms. Hanlon put it.
“We just have to keep it together for 200 years,” she said. — Efrat Livni
HERE’S WHAT HAPPENING
The Fed is taking a breather. At Wednesday’s meeting, the central bank held interest rates unchanged for the first time in more than a year. But officials suggested interest rates would rise further in 2023 as inflation remains “well above” the Federal Reserve’s target.
JPMorgan settles. The bank struck a potential $290 million deal with victims of sex offender Jeffrey Epstein, who claimed the bank overlooked red flags in its operations because it valued him as a wealthy client. JPMorgan Chase is still facing a related lawsuit from the US Virgin Islands government.
Bill Gates meets Xi Jinping in Beijing. The Microsoft co-founder is one of the first prominent US business leaders to meet the Chinese leader since the start of the pandemic. Their talks preceded a visit to China by Antony J. Blinken, the Secretary of State.
Button Light. Modelo Especial replaced Bud Light as the best-selling in America, following a consumer boycott due to a promotional post by a transgender influencer. The controversy has highlighted the challenges brands and retailers such as Adidas and Target have faced in marketing to LGBTQ consumers in a polarized political environment.
Michael Jordan makes a big profit. Investors Gabe Plotkin and Rick Schnall reportedly bought his majority stake in Charlotte Hornets from the National Basketball Association for $3 billion. Jordan acquired the team in 2010 for $275 million and retains a minority stake.
Companies may not know when employees are using AI
Companies like Accenture, PwC and Morgan Stanley announced major initiatives to empower their employees with generative AI tools such as chatbots and image generators. But even at companies that haven’t introduced these tools yet, many employees are using them — and they may not mention it.
In a survey of 4,491 white-collar workers according to the consulting firm Oliver Wyman, 39 percent of those who use generative AI tools said they have done so in the past three months without their employer’s knowledge.
There are risks if employees use these tools without training, including sharing private company data or not understanding that AI tools can produce inaccurate work. (See: The Attorney Who Finally Cited Fabricated Lawsuits in a Legal Briefing.)
But there may also be potential. In a report this week, McKinsey estimated that generative AI could add $2.6 trillion to $4.4 trillion to the global economy. The research looked at 63 use cases for generative AI across 850 professions, finding that 60 to 70 percent of all work tasks can be automated with currently available technology.
“Employee interest, especially among the younger generations, is likely greater than that of many of their managers,” Ana Kreacic, the chief operating officer of Oliver Wyman’s think tank, said in an email to DealBook. “Some organizations are leading and others are catching up, but it takes time for best practices to develop across industries.”
9.7 percent
— How much consumer prices in Sweden increased last month. A possible contributing factor? Beyoncé kicked off her world tour in Stockholm, and fans flocked to the city to see the singer drove up prices for hotel rooms and restaurant meals, according to the Swedish statistics office.
On our radar: ‘Winner sells everything’
Walmart and Amazon’s battle to dominate retail has been an epic business battle. In “Winner Sells All,” to be published Tuesday, business journalist Jason Del Rey describes the clash, with hundreds of billions of dollars at stake, in illustrative detail. Mr. Del Rey has covered e-commerce for over 10 years, and many of Amazon’s and Walmart’s top executives agreed to interviews for the book, as did their employees. Kirkus Reviews called it “a dazzling look at a battle of corporate titans.”
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