Elon Musk's Starlink is facing tough competition in the high-speed satellite internet market. A Chinese state-backed company and another service funded by Amazon founder Jeff Bezos are emerging as strong rivals. Shanghai-based SpaceSail, a Chinese company, signed a deal in November to launch its services in Brazil and is already in talks with over 30 other countries. In January, it also started operations in Kazakhstan, as confirmed by the Kazakh embassy in Beijing.

Separately, a Brazilian official participating in the negotiations, who spoke on condition of anonymity to freely discuss ongoing talks, said Brasília is in talks with Canada's Telesat and Bezos's Project Kuiper internet service. For the first time, news of such conversations is being reported. Since 2020, Starlink has launched more satellites into low-Earth orbit (LEO) – below 2,000 km altitude – than all its competitors combined. These low-altitude satellites transmit data efficiently, providing high-speed internet to remote areas, ships, and military operations. China sees Musk's dominance in space as a threat and is heavily investing in rival projects. It is also funding military research to track satellite networks, as revealed by Chinese corporate records and academic studies that have not been reported before.

According to data from astrophysicist Jonathan McDowell, analysed by tech consultancy Analysys Mason, China set a new record last year by launching 263 satellites into low Earth orbit (LEO). Brazil's government has welcomed the rise of competition to Starlink. They want to provide high-speed internet to remote areas but have had previous disagreements with Musk over business and political issues. When asked about its expansion intentions by Reuters, SpaceSail declined to comment. Last year, a tabloid under the supervision of China's telecoms regulator hailed it as "capable of transcending national boundaries, penetrating sovereignty and unconditionally covering the whole world... a strategic capability that our country must master." Requests for response from Kuiper, Telesat, Starlink, and Brazil's communications ministry were not answered. 

Few of Elon Musk's global competitors are as ambitious as SpaceSail, a company managed by the Shanghai municipal government. SpaceSail has announced plans to launch 648 low Earth orbit (LEO) satellites this year and aims to have as many as 15,000 by 2030. In comparison, Starlink currently operates about 7,000 satellites and has set a goal of reaching 42,000 by the end of the decade, according to expert Jonathan McDowell. China's SpaceSail is working on the Qianfan, or "Thousand Sails," satellite network, which is its first major step into global satellite broadband. Along with this, three other Chinese satellite networks are being developed. Over the next few decades, Beijing plans to launch 43,000 low Earth orbit (LEO) satellites and is investing in rockets capable of carrying multiple satellites at once. According to Chaitanya Giri, a space technology specialist at India's Observer Research Foundation, "the endgame is to occupy as many orbital slots as possible." 

China's rapid expansion in lower-Earth orbit has raised concerns among Western leaders, who fear it could help Beijing extend its internet censorship globally. Researchers at the American Foreign Policy Council think-tank suggested in a paper from February that the U.S. should strengthen ties with nations in the Global South if it wants to effectively challenge China's increasing control over digital technology. The researchers also highlighted Qianfan as an important element of China's space strategy under its Belt and Road Initiative. This $1 trillion global infrastructure plan, which is a key project of Chinese leader Xi Jinping, has faced criticism for being mainly a way for Beijing to expand its global influence. China's commerce ministry and telecom regulator did not respond to requests for comments. When asked by Reuters, China's foreign ministry stated that it was unaware of the details regarding SpaceSail and the expansion of Chinese LEO satellites overseas. However, it emphasised that Beijing promotes space cooperation with other countries to benefit people worldwide. SpaceSail has stated that its goal is to provide reliable internet access, especially for people in remote areas and those affected by natural disasters or emergencies.

Starlink's fast growth and its role in the Ukraine war have drawn the attention of military researchers, including those at China's National University of Defence Technology. In response, China is heavily funding its own satellite networks. Hongqing Technology, a company founded in 2017, is working on a 10,000-satellite constellation and recently raised 340 million yuan from mostly state-backed investors. Similarly, SpaceSail secured 6.7 billion yuan ($930 million) last year in a funding round led by a government investment fund aimed at improving China's manufacturing sector. Chinese researchers, many linked to the People's Liberation Army, are also focusing on satellite technology.

In 2023, China published 2,449 patents related to low-Earth orbit (LEO) satellites, a sharp rise from just 162 in 2019, according to Anaqua’s AcclaimIP database. A Reuters review found that many of these patents focus on building cost-effective satellite networks and improving low-latency communication, highlighting China's effort to close the technology gap. 

"The space world is moving fast and busy experimenting," said Antoine Grenier, global head of space at the Analysys Mason consultancy. "Pioneers are enjoying this relative freedom and are shaping it to their advantage to claim key positions before rules become more stringent “like the wild west." Some of the Chinese research appears to be targeted at Starlink, with one PLA-linked patent application describing the US system as critical to reconnaissance and military communications while posing "threats to network, data, and military security." China is also working on technology to track and monitor Starlink’s satellite network. 

In a study published in January in a Chinese engineering journal, researchers from two institutes linked to the People's Liberation Army (PLA) described a system and algorithm they developed to track large satellite constellations like Starlink. Their approach was inspired by humpback whales, which trap their prey by swimming in circles and creating spiraling bubbles. "With the growing trend of space militarisation, developing tools to monitor and track these megaconstellations is critically important," the researchers wrote.