SpaceX eyes multibillion-dollar Pentagon AI computing deal

Anabelle Colaco
22 Jul 2026, 01:07 GMT+10

Elon Musk's SpaceX is in talks to provide the U.S. Department of Defense with access to billions of dollars' worth of data center capacity to run artificial intelligence models
If reached, the agreement would expand the Pentagon's existing relationship with SpaceX, which is already a key partner for rocket launches, satellite communications and missile-tracking services
According to the report, SpaceX has discussed plans to compete more directly with cloud computing providers such as CoreWeave by offering computing capacity to AI customers at lower prices

NEW YORK CITY, New York: Elon Musk's SpaceX is in talks to provide the U.S. Department of Defense with access to billions of dollars' worth of data center capacity to run artificial intelligence models, the Wall Street Journal reported on Friday, citing people familiar with the matter.

If reached, the agreement would expand the Pentagon's existing relationship with SpaceX, which is already a key partner for rocket launches, satellite communications and missile-tracking services.

According to the report, SpaceX has discussed plans to compete more directly with cloud computing providers such as CoreWeave by offering computing capacity to AI customers at lower prices.

Like many large organizations, the Defense Department is seeking 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 U.S. government customers through its Amazon Web Services cloud business.

The discussions between SpaceX and the Pentagon are ongoing and could still fall through, the Journal reported.

SpaceX and the Pentagon did not immediately respond to requests for comment.

The company has signed similar computing agreements in recent months. In June, SpaceX reached a multi-year cloud services deal with Alphabet's Google, providing access to about 110,000 Nvidia chips and related computing infrastructure.

In May, Anthropic said it had agreed to use the full computing capacity of SpaceX's Colossus 1 facility in Memphis, gaining access to 300 megawatts of new capacity.