SpaceX Reportedly In Talks To Supply Pentagon With AI Computing Power Worth Billions

The two sides are negotiating an arrangement under which SpaceX would provide computing capacity to the department at a cost of up to several billion dollars, according to a report in the Wall Street Journal.

• Amazon, Microsoft, Google and Oracle already provide capacity to the Pentagon.
• 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 report said. 
• SpaceX has already signed cloud-computing deals with Anthropic, Google, and Reflection AI.

Elon Musk’s rocket manufacturing and AI company SpaceX (SPCX) is reportedly in talks with the Pentagon to supply billions of dollars' worth of data-center capacity for running AI models.

According to a report from the Wall Street Journal, the two sides are negotiating an arrangement under which SpaceX would provide computing capacity to the department at a cost of up to several billion dollars. Talks could collapse with no deal, people familiar with the matter told the Journal.

Amazon, Microsoft, Google, and Oracle already provide capacity to the Pentagon. The potential detail would give the United States Department of Defense more cloud-computing resources to support AI applications across the National Security Agency and warfighters.

SpaceX, meanwhile, 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 report said.

SPCX shares closed down 5.5% on Friday, and clocked its sixth consecutive day in the red. 

SpaceX AI Efforts

SpaceX acquired Elon Musk’s xAI earlier this year and went public in June. The company subsequently integrated Grok AI models and data centers into its business under the segment now called SpaceXAI. The company has rapidly built massive data centers in Memphis and has also touted putting up data centers in space to resolve the ongoing computing shortage.

SpaceX has already signed cloud-computing deals with Anthropic, Google, and Reflection AI in recent months to rent out data-center capacity for running AI models. Combined, the three deals represent roughly $27–28 billion in annualized revenue at full rates. All contracts include flexibility clauses allowing early termination, reflecting the fast-moving AI sector.

How Did SPCX Retail Traders React?

On Stocktwits, retail sentiment around SPCX stock stayed within the ‘bearish’ territory over the past 24 hours, while message volume was ‘low.’

A Stocktwits user opined that the potential deal would push the stock above its IPO price yet again.

Another user expressed optimism about the Starship test flight slated for Monday after it was scrapped on Thursday. Starship is key to Musk’s dream of enabling rocket reusability and the company’s aspirations to set up data centers in Space. The rocket, however, is still in its testing phase.

SPCX stock closed at $123.99 on Friday, below its IPO price of $135. 

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