SpaceX’s Expanding Government Footprint Under Trump Administration
Within the Defense Department under the Trump administration, Elon Musk’s SpaceX is being promoted as a novel approach for the Pentagon to expedite military cargo transport across the globe.
The Commerce Department has declared SpaceX’s Starlink satellite internet service fully eligible for the $42 billion federal rural broadband initiative, reversing its previous exclusion during the Biden administration.
NASA, influenced by persistent encouragement from Mr. Musk, is reportedly shifting its focus towards Mars, potentially opening opportunities for SpaceX to secure federal contracts for delivering the first humans to the distant planet.
Furthermore, Starlink satellite terminals have been recently installed at the Federal Aviation Administration and the White House, enhancing federal government internet connectivity.
SpaceX’s Pursuit of Federal Funding
Mr. Musk, who previously advocated for governmental streamlining, initiated significant workforce reductions and agency closures, actions that generated considerable disruption and uncertainty. The precise extent of his influence remains a subject of debate.
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However, SpaceX is strategically positioned to potentially acquire billions of dollars in new federal contracts and support across diverse government sectors, according to multiple current and former federal officials interviewed by The New York Times.
This anticipated surge in federal funding for SpaceX is partly attributed to actions taken by President Trump and Mr. Musk’s allies and former employees now in government roles. Additionally, current administration policies prioritizing commercial space vendors for communications and satellite production, areas where SpaceX holds a dominant position, will further benefit the company.
Reports indicate that SpaceX employees, temporarily assigned to the FAA, were authorized to undertake actions potentially directing new projects to Mr. Musk’s enterprise.
These prospective government contracts would augment the substantial new revenue streams SpaceX could generate by obtaining Trump administration approvals for expanded utilization of federally owned properties.
Expansion at Federal Spaceports
SpaceX currently has at least four pending requests with the FAA and the Pentagon for constructing new rocket launch facilities or increasing launch frequency from federal spaceports in Florida and California. The FAA has recently progressed towards approving one proposal, potentially more than doubling the annual launch allowance for SpaceX’s Falcon 9 rocket at Cape Canaveral Space Force Station in Florida, reaching up to 120.
Seeking Spectrum and Regulatory Approvals
SpaceX is also lobbying the FCC for additional federal radio spectrum. Starlink’s operations rely on radio spectrum for Earth-satellite communication, making increased spectrum allocation a potential profit driver. This initiative is viewed as aggressive expansion by rival cellular providers. The initial approval for increased spectrum was granted this month, following Mr. Trump’s appointment of Brendan Carr, perceived as a Musk supporter, to chair the FCC, replacing the previous chair.
This prospect of enhanced revenue for Mr. Musk’s company follows his donation of nearly $300 million to support Mr. Trump’s 2024 presidential campaign.
Subsequently, Mr. Musk reportedly persuaded President Trump to appoint him to lead cost-reduction efforts, granting him influence over policy and contract decisions as a White House employee and advisor.
Concerns over Influence and Access
“The probability of Elon achieving his objectives is significantly elevated now,” commented Blair Levin, a former FCC official and current market analyst. “His access to the White House and Mar-a-Lago is unprecedented for an industry competitor. No one anticipated this level of access to levers of power.”
SpaceX executives did not respond to requests for comment.
White House Press Secretary Karoline Leavitt stated that Mr. Musk, in his capacity as a special government employee, received briefings on ethical boundaries, including conflict of interest guidelines, and is committed to adhering to all applicable federal laws.
Prior to the commencement of the second Trump administration, SpaceX had already established itself as a major federal contractor, securing $3.8 billion in commitments for fiscal year 2024 across 344 contracts, based on a New York Times analysis of a federal contracting database.
Even without Mr. Musk’s formal government role or a hypothetical second Biden term, SpaceX was expected to continue securing government contracts. The primary shift lies in the anticipated augmented value of contracts awarded to SpaceX.
Douglas Loverro, a former senior NASA and Pentagon official and advisor to the Trump transition team on space matters, affirmed SpaceX’s merits in securing many of these supplementary contracts.
“He possesses superior technology,” Mr. Loverro stated, referencing Mr. Musk. “These developments will stimulate the space industry overall, and SpaceX stands to gain significantly.”
However, other government contracting experts express ongoing concerns regarding Mr. Musk’s potential for securing preferential treatment, particularly after Mr. Trump dismissed officials responsible for investigating ethics violations and potential conflicts of interest.
“It’s impossible to ascertain whether SpaceX would genuinely win open competitions for these awards because government offices designed to prevent corruption and conflicts of interest have been dismantled or defunded,” asserted Danielle Brian, executive director of the Project on Government Oversight, a non-profit that monitors federal contracts.
“The escalating abuse of power and corruption across federal agencies due to Musk’s dual roles is alarming,” she added.
Pentagon Expansion
SpaceX had been proactively pursuing increased business with the Pentagon and intelligence agencies for several years leading up to Mr. Trump’s return to office.
The company strategically hired former military officials, who then engaged with their Defense Department contacts to encourage increased procurement of SpaceX services.
Gary Henry, a former Air Force space and missile program supervisor, was among these hires. He joined SpaceX during the development phase of Starship, the company’s large and powerful spacecraft.
During Mr. Henry’s tenure at SpaceX, the company was awarded a $102 million Air Force contract to evaluate Starship’s potential for rapid global delivery of military cargo within 90 minutes. Currently, this function is largely fulfilled by Air Force C-130 cargo aircraft, requiring significantly longer travel times.
Starship’s operational status is still under development, with recent test flights culminating in explosions and debris dispersion over the Caribbean.
Despite these setbacks, Mr. Henry, now serving as a Pentagon consultant, continues to advocate for Starship as a viable military transport solution.
Speaking at a satellite industry conference in California on behalf of the Pentagon last month, he detailed Starship’s prospective application during the Trump administration for swift delivery of substantial military equipment “to any global location.”
Subsequently, the Air Force announced plans to construct a rocket landing platform on Johnston Atoll in the Pacific Ocean, designed for testing these cargo landings. The Pentagon’s initial objective is to transport 100 tons of cargo per flight, a capacity currently matched only by Starship, based on its design specifications.
“It’s frustrating,” commented Erik Daehler, a vice president at Sierra Space, another company vying for Pentagon cargo contracts. “Opportunities should not be exclusively channeled to SpaceX.”
Maj. Gen. Steve Butow, director of the space portfolio at the Pentagon’s Defense Innovation Unit, acknowledged the “unfortunate optics” surrounding Mr. Henry’s public endorsements of a project for which he previously worked at SpaceX, while representing the agency.
In an interview, Mr. Henry defended the broader benefits of commercial space capabilities offered by SpaceX and other companies like Rocket Lab.
“Commercial space is broadly relevant to addressing critical challenges,” he stated. “SpaceX currently holds a leading or pioneering position.”
Current and former Pentagon officials anticipate an even more significant boost for SpaceX through a missile defense initiative termed “Golden Dome.”
President Trump has directed the Pentagon to expedite the development of systems for intercepting nuclear missiles targeting the United States, as well as lower-trajectory threats like cruise and hypersonic missiles. This undertaking could potentially involve annual expenditures of $100 billion, according to one estimate.
SpaceX is already well-positioned to secure a substantial portion of Pentagon military launch contracts in the coming years, alongside Blue Origin, owned by Jeff Bezos, and United Launch Alliance, a joint venture of Lockheed Martin and Boeing.
A space-based missile defense system would further escalate launch expenditures, necessitating increased procurement of devices for missile threat detection and data transmission for targeting purposes – services also offered by SpaceX.
Air Force spokeswoman Ann Stefanek stated that the Space Force is committed to adhering to all applicable laws and regulations to ensure ethical and effective partnerships, generally requiring competitive bidding for new contracts.
However, industry observers predict SpaceX will likely capture a significant share of this lucrative new business.
Laura Grego, a senior researcher at the Union of Concerned Scientists, a non-profit group, remarked, “Golden Dome is an appropriate name, given its anticipated enormous cost.”
NASA’s Focus on Mars
Mr. Trump’s nominee to head NASA, Jared Isaacman, is a billionaire entrepreneur and space enthusiast who has personally funded SpaceX flights into orbit on two occasions.
Furthermore, his payment processing firm, Shift4 Payments, made a substantial investment in SpaceX several years ago, generating $25 million in profits in recent years, effectively establishing a business partnership between him and Mr. Musk. This SpaceX stake was recently divested, according to a Shift4 executive. In ethics disclosures released this month, Mr. Isaacman pledged to sever any remaining financial connections with SpaceX.
Should his nomination be confirmed, Mr. Isaacman would join Michael Altenhofen, a former 15-year SpaceX veteran, who was appointed as a NASA senior advisor in February.
To date, NASA has awarded more funding to SpaceX than even the Pentagon, totaling $13 billion in contractual commitments over the past decade. These agreements include contracts for cargo and astronaut transport to orbit, as well as deploying NASA’s largest and most sophisticated probes into space.
Just last month, NASA awarded SpaceX an estimated $100 million contract to launch a new space telescope for detecting potentially hazardous asteroids.
However, this figure represents a relatively small fraction of the potential new funding SpaceX could obtain from NASA during Mr. Trump’s second term.
Former NASA officials anticipate Mr. Isaacman to rapidly advocate for a restructuring of the agency’s Artemis program, aimed at returning American astronauts to the moon. This proposal may encounter resistance due to the program’s congressional support.
Currently, Boeing holds a major contract for constructing rockets for the Artemis program. However, Mr. Loverro and other former agency officials expect the government to gradually discontinue this rocket project, citing substantial delays and budget overruns.
This shift could enable NASA to transition to commercial space companies like SpaceX or Blue Origin for astronaut transport to orbit for future lunar and Martian missions.
Mr. Musk recently asserted that SpaceX intends to launch an unmanned Starship to Mars by the end of 2026, followed by the first human mission by approximately 2029 – an undertaking he is likely to seek NASA’s financial support for. (It is noted that Mr. Musk’s past timeline predictions have not always been accurate.)
Executives at Boeing and Blue Origin declined requests for comment.
SpaceX is “almost certain to experience substantial new business,” observed Pamela Melroy, a retired astronaut and Air Force officer who served as NASA’s deputy administrator during the Biden administration. “All indicators are positive for SpaceX.”
Expanding Broadband Access to Rural Areas
Starlink had previously faced obstacles in accessing federal incentives designed to expand internet access in underserved areas.
Commerce Secretary Howard Lutnick pledged during his January confirmation hearing to rectify this situation.
He vowed to revise the Commerce Department’s management of the $42 billion in funding allocated to states for broadband expansion. The Biden administration had prioritized fiber-optic systems directly connecting homes to internet networks over satellite-based systems like Starlink.
“Let’s utilize satellites, wireless, and fiber,” Mr. Lutnick stated at the hearing. “And let’s pursue the most cost-effective and efficient approaches.”
Senator Ted Cruz, Republican of Texas, a frequent advocate for Mr. Musk’s interests in Washington, had been lobbying the Commerce Department to relax grant regulations to accommodate satellite-based broadband in rural areas where cable deployment can be prohibitively expensive.
Arielle Roth, Mr. Cruz’s former Senate aide who actively contributed to this lobbying effort, has been nominated by Mr. Trump to lead the Commerce Department agency responsible for overseeing the grant program.
The Federal Communications Commission operates a separate, smaller grant program also aimed at funding broadband deployment in underserved regions of the United States. Starlink was initially slated to receive nearly $1 billion in funding before the FCC rescinded the offer in late 2023, citing service inadequacy.
However, the FCC board is now chaired by Mr. Carr, who had previously opposed the decision to deny SpaceX those funds. Industry analysts and two former FCC commissioners interviewed by The Times anticipate the agency will reinstate some grant funding opportunities for Starlink.
This month, the FCC also approved a SpaceX request, despite objections from Verizon and AT&T, to increase the power output of Starlink satellites to enable direct smartphone service from orbit, effectively eliminating cellular dead zones for some users.
Successful outcomes for SpaceX in these various initiatives “could be transformative – potentially amounting to tens of billions of dollars,” according to Drew Garner, a researcher at the Benton Institute for Broadband & Society.
However, there could be long-term implications for consumers nationwide.
Monthly satellite internet subscription costs for consumers generally exceed those of wired internet services. Satellite systems also tend to offer slower connection speeds compared to cable-based internet.
“Confining rural America to inferior internet access solely to further enrich the world’s wealthiest individual represents yet another betrayal by Washington,” Evan Feinman, who directed the Commerce Department’s rural broadband program during the Biden administration, wrote in an email to colleagues on his departure day from the agency.
Modernizing Aviation Infrastructure
Following a fatal midair collision in January involving an Army helicopter and a commercial jet, Transportation Secretary Sean Duffy sought assistance from Mr. Musk.
Mr. Duffy indicated that the Federal Aviation Administration, engaged in modernizing its air traffic control and weather data systems, required enhanced technical expertise.
SpaceX teams were subsequently integrated into the agency to provide support for these efforts.
Mr. Musk publicly criticized Verizon on social media for perceived slow progress on a multibillion-dollar agency contract awarded in 2023 to deliver new technology.
“The Verizon system is malfunctioning and consequently poses a significant risk to air travelers,” Mr. Musk posted on X last month.
Theodore Malaska, a SpaceX employee collaborating with the FAA, received a special ethics waiver from the Trump administration to participate in “specific matters potentially impacting SpaceX’s financial interests,” according to documents obtained by The Times.
Shortly thereafter, Mr. Malaska publicized on X the FAA’s integration of SpaceX’s Starlink satellites into agency systems for disseminating weather data to pilots—a design that could lead to future federal contracts for SpaceX.
An FAA spokesman stated that as of mid-March, only eight Starlink terminals were operational, and Mr. Musk indicated they were donations. However, additional Starlink terminals have been recently installed at the White House and the General Services Administration offices.
“My work is unbiased and focused on ensuring air travel safety,” Mr. Malaska asserted in a social media post.
This convergence of roles—SpaceX employees advising agencies while SpaceX installs Starlink devices at agency facilities—presents an ethical scenario with limited parallels in modern American history.
Federal regulations generally preclude awarding contracts to federal employees, including special government employees. Federal employees are also restricted from undertaking actions that may benefit their families or external entities with whom they have financial affiliations.
Mr. Musk has contended that he is not personally involved in pursuing SpaceX contracts. However, federal contracting guidelines mandate that the government avoid not only actual conflicts of interest but also the appearance of such conflicts.
“Objectively, this situation is inappropriate,” stated Steven Schooner, a former government contracts lawyer currently a professor at George Washington University specializing in government procurement.
“Given his considerable influence and access,” Mr. Schooner added, “we have not witnessed anything comparable.”
Mark Walker and Aaron Krolik contributed reporting.