Elon Musk’s SpaceX is in talks with the US Department of Defence to provide data centre capacity worth billions of dollars for running artificial intelligence (AI) models, according to a Wall Street Journal report published on Friday.
The report, which cited people familiar with the discussions, said the deal would give the Pentagon access to large-scale computing power needed for advanced AI work.
However, the talks are still underway, and no final agreement has been signed. The discussions could still fall through.
SpaceX wants to compete in the AI cloud market
If the deal goes through, it would boost SpaceX’s relationship with the Pentagon. The company already works closely with the US military by providing rocket launch services, satellite-based communications and missile-tracking support. This new agreement would add AI computing infrastructure to that partnership.
The report also mentioned how SpaceX is looking beyond government contracts.
According to the Wall Street Journal, employees at the company have discussed plans to compete more directly with AI cloud providers, also known as “neocloud” companies, such as CoreWeave.
The idea is to sell computing power to AI customers at lower prices, making SpaceX a stronger player in the fast-growing AI infrastructure market.
On the other hand, like many large organisations, the US Department of Defence is trying to secure more cloud computing capacity as it expands the use of artificial intelligence. The additional computing power would support intelligence agencies and help develop AI applications for military use.
Last year, Amazon announced that it would invest up to $50 billion through its Amazon Web Services (AWS) cloud business to expand AI and supercomputing capacity for US government customers.
SpaceX has already signed major AI computing deals
This would not be the first major cloud computing agreement for SpaceX.
In June, Google signed a multi-year, $30 billion agreement with SpaceX to lease large-scale AI computing infrastructure. Under the deal, Google will pay around $920 million every month from October 2026 through mid-2029 for access to 110,000 Nvidia GPUs and other AI hardware. The partnership is expected to strengthen Google’s AI capabilities while supporting SpaceX’s growing data centre business.
Earlier, in May, AI company Anthropic announced that it would use the full computing power of SpaceX’s Colossus 1 facility in Memphis. The deal added 300 megawatts of new computing capacity for Anthropic’s AI work.