Trump vs Musk: Public feud threatens $22 billion in SpaceX deals, competitors gain ground as rift escalates
About $22 billion in government contracts held by
SpaceX
are now in jeopardy, with several US space programs potentially facing major disruptions following a heated public feud between the space company founder
Elon Musk
and US President
Donald Trump
on Thursday.
Trump claimed that ending Musk's federal subsidies would save 'billions and billions of dollars.'
In response, Musk threatened to begin 'decommissioning' SpaceX's Dragon spacecraft, a critical vehicle used by
Nasa
for transporting astronauts. However, just hours later, Musk appeared to backtrack. After a follower on X urged both men to "cool off and take a step back for a couple of days," Musk replied, 'Good advice. Ok, we won't decommission Dragon.'
Musk's SpaceX is a cornerstone of America's space infrastructure, from satellite launches to crewed spaceflights. But tensions boiled over after Trump criticized Musk's favored spending policies and withdrew support for Jared Isaacman, the billionaire private astronaut once expected to lead the US space agency, claiming he was 'totally Democrat.'
Trump is reportedly considering retired Air Force Lt Gen Steven Kwast, an advocate for space-based defense and competition with China, to lead the US space agency.
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His nomination would signal a shift away from Musk-style innovation toward a more national security-focused approach.
The leadership vacuum comes amid deep proposed cuts to US space programs under Trump's
budget
plan, which would cancel dozens of science initiatives and halt Artemis moon missions after the third launch. Musk's Mars-focused ambitions, previously central to Trump's space agenda, now appear at odds with shifting political priorities.
Despite White House plans to scale back, the senate commerce Committee on Thursday released a version of the budget bill that restores funding for Artemis missions four and five and provides at least $1 billion annually for the Space Launch System (SLS) rocket through 2029. Whether Trump accepts or fights these provisions will reveal how much sway Musk still holds.
SpaceX dominance under threat
SpaceX has secured roughly $15 billion in government contracts, including major Nasa deals for the Falcon 9 and Starship launch systems and Pentagon contracts for national security satellite missions.
The company is also building a secretive surveillance satellite network for a US intelligence agency and developing a military offshoot of Starlink known as Starshield.
Shares of EchoStar and AST SpaceMobile, two rivals to SpaceX's Starlink satellite network, jumped 16 per cent and 8 per cent respectively this week, reflecting investor bets that Musk's fallout with Trump could open the door to alternatives.
Boeing, Northrop Grumman, and
Jeff Bezos
' Blue Origin are all developing systems that could one day replace some of SpaceX's functions.
Amazon's Project Kuiper, meanwhile, is emerging as a potential Starlink rival, with enough satellites expected in orbit by the end of the year to begin offering services, including to the US government.
Former Nasa deputy administrator Lori Garver warned that while canceling SpaceX's contracts would likely be illegal, the broader situation is troubling. 'A rogue CEO threatening to decommission spacecraft, putting astronauts' lives at risk, is untenable,' she said.
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