In the bitter fallout from the breakup of the year, President Donald Trump threatened to cancel government contracts held with Elon Musk and his SpaceX operations. Now that he’s in the “find out” stage, he’s discovering it’s not as easy as he thought.
Trump administration staffers tasked with reviewing SpaceX’s government contracts believe that terminating them would have a serious impact on both NASA and the Defense Department, according to a new report from The Wall Street Journal.
Following the review, only a few of SpaceX’s existing contracts could face further scrutiny. None of them, however, has been canceled, as there simply isn’t any rival who can do the job more cheaply or reliably.
This is unsurprising, given that SpaceX is by far the biggest company in the world when it comes to putting stuff into space. Last year, it accounted for 83 percent of global satellite launches.
The U.S. government has contracted with the company for years, and its technology is instrumental in maintaining Ukrainian military communications in the ongoing Russian conflict. For its services, Musk’s company has received at least $21 billion in taxpayer funding, with an additional $13 billion still to come.
Musk is not the only billionaire in the space game though, and the government has long been concerned about the effective monopoly of Musk’s company. Jeff Bezos’ Blue Origin won seven contracts in the last round of Trump administration awards, even though SpaceX nabbed 28, a little over half.
“There’s no replacing SpaceX,” defense and space analyst Todd Harrison told Forbes. “You just do not have the capacity in our other launch options.”
Still, SpaceX is not the only Musk-affiliated company that the U.S. government has ties to. Earlier this week, the government announced a $200 million deal between the Pentagon and the Musk-owned xAI company to develop artificial intelligence capabilities in the “warfighting domain.” The news came not long after the xAI-built chatbot Grok described itself as “MechaHitler” on X.
In total, the man who was once the head of the DOGE department tasked with slashing government spending has swept up government contracts worth $38 billion.
Many of these contracts—$15.7 billion of which went to Tesla—were signed under former President Joe Biden. Despite the current administration’s fervor for tarnishing the reputation of its predecessor, this is one area where it simply seems to be stuck.
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