Here's why SpaceX faces a bright future as government contractor despite Musk-Trump divorce

New York Post

19 hours ago

The public breakup between Elon Musk and President Trump has cast a pall over the future of SpaceX – but the mogul's company should remain on a solid trajectory because the two sides need each other.
Trump has counted on his estranged First Buddy's privately owned firm to fulfill the administration's plans for NASA to return to the moon, ongoing operations at the International Space Station, a reported classified deal with US intelligence to build hundreds of spy satellites and expanding internet access to rural parts of America.
SpaceX – known for building and launching rockets, and the Starlink satellite internet network – has approximately $22 billion in government contracts on the books, according to Reuters.
4 Elon Musk, shown with President Trump in Texas last year, called for Trump to be impeached.
Getty Images
That includes a roughly $5 billion deal to build the Dragon spacecraft for use by NASA, which Musk threatened to decommission in his unhinged social media rants aimed at Trump – only to later reverse course hours later.
Trump threatened to end Musk's federal contracts in response to the verbal onslaught, which included the allegation that Trump is 'in the Epstein files' and that he would have 'lost the election' without his help.
'Trump could certainly cancel most deals and contracts if he wants but the government may still have to pay them – depends on the contract details,' a Republican consultant connected with Trump, who was granted anonymity to speak candidly about the feud, told The Post on Friday.
The two men appeared no closer to a detente, with Trump refusing to get on the phone with his former DOGE cost-cutter and largest campaign benefactor after he blasted the White House-backed 'One Big Beautiful Bill.'
While that makes for great theater, the split probably works in both of their favors, according to the source.
'Trump and Elon both got what they wanted here,' the GOP consultant said.
'Elon was able to distance himself from Trump in a public enough way to get his businesses back on track and Trump was able to have all of the MAGA warriors who were questioning the bill shut up or even defend it so they could defend Trump and prove they took his side.'
SpaceX 'will be fine' despite the fireworks, the source added.
4 President Trump said Friday that Musk had 'gone crazy.'
AP
White House Press Secretary Karoline Leavitt declined to comment on the war of words.
'President Trump is focused on making our country great again and passing the One Big Beautiful Bill,' she said.
SpaceX did not immediately return a request for comment.
As the founder, chairman and CEO of SpaceX, Musk is in total control with 79% of the company's voting shares as of 2023, according to a filing at the time. The closely held firm recently secured a $350 billion valuation.
Overall, Musk and his businesses that also include Tesla, brain chip firm Neuralink and The Boring Company have received at least $38 billion in government contracts, loans, subsidies and tax credits, according to a recent Washington Post analysis.
If Trump does decide to go to DefCon 5 on Musk, the billionaire's alleged drug use could be used as one possible lever to wriggle out of the SpaceX contracts.
4 SpaceX is key to NASA's plans to return to the Moon.
REUTERS
During Trump's first term in office in 2019, Bloomberg reported that the Pentagon was reviewing Musk's SpaceX security clearance after he smoked marijuana during an appearance on 'The Joe Rogan Experience' podcast.
While Musk has strenuously denied misusing drugs, House Democrats this week requested details from Trump on whether he had any knowledge of Musk working 'under the influence.'
The possible loss of government contracts would not be 'catastrophic' for Musk or his rocket company.
'SpaceX has developed itself into a global powerhouse that dominates most of the space industry, but there's no question that it would result in significant lost revenue and missed contract opportunities,' Justus Parmar, CEO of SpaceX investor Fortuna Investments, told Reuters.
Meanwhile, MAGA firebrand Steve Bannon called for the South African-born Musk to be deported – and floated the possibility that Trump could use a Korean War-era statute called the Defense Production Act to enable a federal takeover of the privately owned company.
4 SpaceX has about $22 billion in federal contracts.
REUTERS
However, the headline-grabbing proposal is likely a nonstarter.
'There's no way Bannon's idea of just taking over private companies works out long term, both because it would be litigated and because other companies would keep the US government at arm's length to avoid future similar issues,' the consultant said. 'Neither outcome is workable.'