Elon Musk's SpaceX On Track To Secure Billions In Federal Contracts Under Trump: Report

SpaceX, led by Elon Musk, is reportedly on the verge of securing billions in new federal contracts, indicates reports. The company is pursuing federal contracts to transport the first humans to Mars, aligning with Musk’s push for NASA to focus on the red planet.

What Happened: The Trump administration’s Defense Department is backing the rocket technology of Elon Musk‘s SpaceX for global military cargo transportation while the company’s Starlink satellite internet service is now eligible for the $42 billion rural broadband initiative. The company is further expanding federal government internet access by installing Starlink satellite dishes at the Federal Aviation Administration (FAA) and the White House, reported The New York Times.

SpaceX did not immediately respond to Benzinga’s request for comment.

These developments follow Musk’s substantial donation to Trump’s 2024 campaign and his subsequent appointment as the head of the Department of Government Efficiency (DOGE). As a result, SpaceX is expected to see a significant increase in federal spending, partly due to the backing of President Donald Trump and Musk’s allies in government positions.

Before the second Trump administration, SpaceX became one of the largest U.S. federal contractors, securing $3.8 billion in commitments for fiscal year 2024 across 344 contracts, as per the publication.

Now, SpaceX is seeking permission from the Trump administration to expand its use of federally owned property, with at least four pending requests to the FAA and the Pentagon for new rocket launchpads or increased launch frequency from federal spaceports in Florida and California.

SpaceX, along with Jeff Bezos‘s Blue Origin and United Launch Alliance, jointly run by Lockheed Martin LMT and Boeing BE, is set to handle a significant portion of the Pentagon's military launch contracts in the coming years.

Why It Matters: SpaceX’s potential windfall comes after Musk’s other venture, Tesla Inc. TSLA, saw a significant drop in stock value following Musk’s deep involvement in Trump’s DOGE. This development led to a 50% plunge in Tesla’s stock from its December high, causing SpaceX to surpass Tesla as Musk’s most valuable asset.

While some see Musk’s growing hold in federal agencies and the prominence of SpaceX as a misuse of power and conflict of interest, others believe in the technological prowess of SpaceX and Musk. A former senior NASA and Pentagon official, Douglas Loverro, opined, "He does have the best tech.” Loverro added, "All of this will lift the space industry as a whole, obviously — but it will certainly help SpaceX even more."

Meanwhile, SpaceX’s dominance in the commercial space sector may face challenges by Chinese startups, backed by President Xi Jinping, who aim to surpass SpaceX by 2030. At least six reusable Chinese rockets are expected to launch this year, marking a turning point for China’s commercial space sector.