Elon Musk’s SpaceX is reportedly in negotiations with the U.S. Department of Defense to provide access to data center capacity worth billions of dollars, according to a Wall Street Journal report published Friday, citing individuals with knowledge of the discussions.
If finalized, the agreement would deepen the existing partnership between the Pentagon and SpaceX, which already serves as a major contractor for rocket launches, satellite communications, and missile tracking services.
According to the Journal, SpaceX employees have been discussing plans to take on neocloud companies like CoreWeave more directly by offering computing capacity to artificial intelligence customers at more competitive prices.
The Defense Department, like many large organizations, is working to lock in additional cloud computing resources to support military AI applications and intelligence operations.
The push for computing power is not unique to SpaceX. Amazon announced late last year that it plans to invest as much as $50 billion to grow AI and supercomputing capacity for U.S. government clients through its Amazon Web Services division.
The Wall Street Journal noted that talks between SpaceX and the Pentagon are still in progress and may not result in a deal. Neither SpaceX nor the Pentagon responded to requests for comment from Reuters, which was also unable to independently confirm the report.
SpaceX has been active in striking similar agreements recently. In June, the company signed a multi-year cloud services deal with Alphabet’s Google, giving Google access to roughly 110,000 Nvidia chips and associated computing infrastructure.
In May, AI company Anthropic announced it had reached an agreement to utilize the full computing capacity of SpaceX’s Colossus 1 facility located in Memphis, adding 300 megawatts of new computing power.
