SpaceX, led by Elon Musk, is looking to power the Pentagon’s artificial intelligence infrastructure in addition to launching satellites and rockets. The Wall Street Journal reported on Friday that SpaceX is in talks with the US Department of Defense to supply billions of dollars in data center capacity to train AI models. Such an arrangement would strengthen the Pentagon’s current ties with SpaceX, a crucial partner in rocket launches, satellite-based communications, and missile tracking.
Discussions between SpaceX and the Pentagon are ongoing and could still fall apart. SpaceX and the Pentagon did not immediately respond to Reuters requests for comment. Reuters could not independently verify the report. Despite the limitations, the mere fact of these negotiations marks a significant expansion of SpaceX’s business ambitions from hardware and launch services into cloud infrastructure and AI compute.
“Musk’s SpaceX is in talks to provide the US Department of Defense with access to data center capacity worth billions of dollars to run AI models, the Wall Street Journal reported. The deal would extend SpaceX’s existing Pentagon relationship beyond rockets and satellites.”~Reuters
Google Pays $920 Million Monthly, Anthropic $1.25 Billion:
The Pentagon talks are not SpaceX’s first foray into selling computing capacity to major institutional customers. In June, SpaceX signed a multi-year cloud services agreement with Alphabet’s Google, providing access to about 110,000 Nvidia chips and related computing infrastructure. Anthropic said in May it had struck a deal to use the full computing power of SpaceX’s Colossus 1 facility in Memphis, gaining 300 megawatts of new capacity.
In June 2026, Google signed a cloud computing contract with SpaceX worth $920 million per month. Anthropic also agreed to a monthly payment of $1.25 billion for processing resources to fuel its Claude AI system. Those two transactions alone represent more than $2 billion in monthly recurring computing revenue, positioning SpaceX as a real cloud infrastructure player rather than just a launch provider with excess GPU capacity.
SpaceX plans to significantly expand its cloud computing activities, including directly competing with suppliers such as CoreWeave by selling computer capacity at reduced pricing. SpaceX has already struck cloud computing agreements with Anthropic, Google, and Reflection AI. The lower-price approach against CoreWeave is especially significant, indicating that SpaceX views price as a competitive weapon as it expands its cloud client base beyond the initial high-profile anchor partnerships.
“SpaceX is in talks to sell computing power to the US Department of Defense, the WSJ reported adding to a spate of infrastructure deals for Elon Musk’s rocket, satellite and artificial intelligence conglomerate. The deal could be worth several billion dollars.”~Bloomberg
Why The Pentagon Is Looking At SpaceX And What Makes This Deal Different?
Like many large enterprises, the Defense Department is moving to secure additional cloud-computing capacity to support intelligence agencies and military AI applications. Amazon said late last year it would invest up to $50 billion to expand AI and supercomputing capacity for US government needs. The Pentagon wants to build data centers on its own installations, a Defense Department spokesperson said.
The Pentagon already has capacity from Amazon, Microsoft, Google, and Oracle. SpaceX’s entry into this market would pit Musk’s business up against those well-established hyperscalers for one of the most lucrative and strategically important computing contracts out there. SpaceX is a legitimate fourth player in the Pentagon’s cloud ecosystem because of its established security clearances from its launch and Starlink contracts, its proven Colossus infrastructure, and its ability to price aggressively against CoreWeave.
The deal’s political dimension cannot be ignored. Elon Musk’s relationship with the Trump administration including his role leading the Department of Government Efficiency has placed him at the intersection of government contracts and political influence in a way that is unprecedented for a private sector CEO. Whether that relationship accelerates the Pentagon computing deal or creates its own complications in Congressional scrutiny will be one of the more closely watched dynamics if negotiations move toward a formal agreement.
“SpaceX in talks to supply Pentagon with AI computing power worth billions. SpaceX already provides Google 110,000 Nvidia chips via a $920M/month deal and Anthropic 300MW of Colossus capacity for $1.25B/month. Pentagon wants on-site data centers at military installations.”~The Defense Post
A Month That Rebuilt SpaceX’s Business: From the IPO to Pentagon
SpaceX’s initial public offering took place just last month. Now it is already talking to the US military about a deal that could be worth several billion dollars. SpaceX shares dropped 5.5%, closing at $123.84 by 3:38pm in New York following the IPO last month. The share price movement on the day the story broke reflects investor uncertainty about the financial and political risks of deepening Musk’s companies’ government entanglements even as the commercial logic of a Pentagon computing contract appears straightforward.
For SpaceX specifically, a successful Pentagon deal would cement its transition from a launch-services company into a diversified technology infrastructure business. The Colossus facility in Memphis which already hosts 300,000 Nvidia H100 GPUs gives it genuine scale. The military computing contract, if finalised, would add the world’s most creditworthy customer to a growing cloud revenue base that is already generating over $2 billion per month from Google and Anthropic alone.
