Even if this was true, so what?
- "It has booked 77 launches – deals that include options for more launches when needed – from that trio of companies to deploy the satellites fast enough to meet regulatory requirements. That massive purchase has come under scrutiny from an Amazon shareholder lawsuit, which alleges the company snubbed SpaceX for valuable satellite launch contracts because of Jeff Bezos' personal rivalry with Elon Musk."
Far from irrelevant celebrity gossip, that personal relationship between America's two top oligarchs is a powerful factor shaping America's space industry. Apparently some Amazon investors believe Kuiper would be, and should be, a SpaceX client, if not for Bezos' and Musk's personal rivalry. (I'd go a step further and posit both Kuiper and Blue Origin wouldn't even exist without that factor. Mine's not a fringe view. Kuiper particularly looks like a long shot, because it's directly fighting against SpaceX's biggest strength: large-number launch economics. Of all the ways to try to get a foothold in the new space industry, the Kuiper approach is one of the least logical).
This misses Amazon’s strength - AWS. Launches are a fraction, granted a non-trivial fraction, but still a fraction, of actually running a space-to-ground network.
Who’s going to have the best latency to your enterprise infra in AWS DCs? Offer you “free egress to satellite links”?
The US military will want multiple providers.
List goes on.
Other posters have already pointed out why Amazon would want this. Since they have the money to spare why not roll their own instead of being at the mercy of another company for what could be crucial infrastructure.
As for using SpaceX, the person who owns it operates a rival internet satellite network, it’s a conflict of interest.
If Amazon doesn’t support an alternate launch provider, SpaceX will have a monopoly and then they are in trouble.