According to a report from Reuters, SpaceX has been contracted by the Department of Defense’s National Reconnaissance Office (NRO) to build a network of hundreds of low-orbiting spy satellites capable of operating as a swarm.
Starsheild is just a satellite bus, which is just sorta like the central building block for satellites. It handles communication, navigation, etc. The government will likely be in total control of the system once it's deployed.
Probably a lot from star link business but separately, launching a government satellite does not give you continued access to that satellite's business.
Oh don't worry, they're not giving him the real spy satellite optics for these flying digital cameras. A low orbit trash satellite cluster that will waste itself in no time is just a nice thing for the DoD to shovel money into.
Each keyhole satellite, by comparison, costs $1 billion.
They are just finally moving on from getting fleeced by the traditional massive defense contractors. Starlink satellites are an extremely cool piece of engineering, and spaceX is one of the most impressive engineering companies in the world. I'm sure these spy sats they are making are fairly advanced
See Wendover Productions' most recent video, "The Increasing Reality of War in Space" (from around 7:54); they talk about SpaceX launching unknown satellites and not reporting it either.
There are about half a dozen small companies working on this but apparently the government is more interested in spending money on a company with zero experience with earth imaging. Dunno how I feel about the USG just putting all their eggs in Elon's batshit insane basket
My guess is the optics themselves don't need to be very mind blowing anymore. If this is a constellation, you will basically have the ability to combine many lesser quality images into higher res versions for review, and in near realtime, and from many different angles. Slap some AI upscaling magic in there, some object tracking and things like gait and attribute recognition, and you have something fairly close to 'Enemy of the State' capabilities, minus all the BS zooming and looking through walls.
It's not necessarily imaging as in optics. Could be OPIR, encrypted comms, space to space ASAT, or any number of other things besides just earth imaging.
I assume the hard part here is the deployment of thousands of low orbit satellites at a rapid rate, not the imaging. The government surely already has the imaging tech, it's getting a swarm of satellites up there what's no other company has proven able to do.