SpaceX is in talks with the U.S. Department of Defense to supply billions of dollars worth of data-center capacity for running AI models, according to a Wall Street Journal report, marking Elon Musk's most significant push yet into the military AI computing market.
The potential deal would give the Pentagon additional cloud-computing resources to support AI applications across the National Security Agency and warfighters, joining incumbent defense cloud providers Amazon, Microsoft, Google, and Oracle. People familiar with the matter cautioned that talks could still collapse with no deal.
The negotiations come as SpaceX rapidly expands its AI infrastructure ambitions. The company acquired Musk's xAI earlier this year and went public in June under the SPCX ticker, integrating Grok AI models and massive data centers into a business segment now called SpaceXAI. It has already signed cloud-computing deals with Anthropic, Google, and Reflection AI — representing roughly $27-28 billion in annualized revenue at full rates.
SpaceX is planning a major expansion of its cloud-computing efforts, including competing directly with providers like CoreWeave by offering its computing capacity at lower prices. The company has rapidly built massive data centers in Memphis and has touted ambitions to put data centers in space to resolve the ongoing computing shortage.
The Pentagon push comes amid a broader scramble by tech companies to secure defense AI contracts. In May, the Pentagon signed classified AI agreements with SpaceX, OpenAI, Google, and five other companies — though notably excluded Anthropic, which had resisted military applications of its technology. SPCX stock closed at $123.99 on Friday, below its $135 IPO price, and marked its sixth consecutive day in the red.
