SpaceX in Talks for Multibillion-Dollar Defense AI Computing Contract
SpaceX is reportedly in discussions with the U.S. Department of Defense for a multi-billion-dollar contract to provide AI computing services via its data centers. The deal, if finalized, would allow the Pentagon to run AI models on SpaceX infrastructure, following similar agreements with Alphabet and Anthropic. This development is significant for investors as SpaceX recently acquired xAI, forming a $1.6 trillion entity, and posted a net loss of $4.9 billion in 2025 due to xAI's $6.4 billion operating loss. A DOD contract could help offset these losses and provide a durable, high-switching-cost revenue stream. However, the article notes the deal is tentative and could fall apart, and the author does not recommend SpaceX as a 'screaming buy' at current valuation.
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