SpaceX faces a potential threat to approximately $22 billion (around Rs. 1,88,626 crore) in government contracts, with significant implications for various US space programs. This situation arises from an escalating dispute between Elon Musk and former President Donald Trump that erupted on Thursday.
The conflict originates from Musk’s criticism of Trump’s tax cut and spending legislation, which began circulating last week. Tensions heightened during an Oval Office discussion, prompting Trump to respond sharply to Musk’s comments. Musk further escalated the situation through a series of posts on X, where he fired back at Trump, who then suggested he might cancel government contracts with Musk’s companies.
In response to this threat, Musk indicated plans to begin “decommissioning” SpaceX’s Dragon spacecraft, which is utilized by NASA.
However, Musk later appeared to reconsider his stance. After a follower on X advised him and Trump to “cool off,” Musk replied, “Good advice. Ok, we won’t decommission Dragon.”
The initial suggestion to take the Dragon spacecraft out of service represented an unusual outburst from one of NASA’s primary commercial partners.
Under a significant $5 billion (approximately Rs. 42,874 crore) contract, the Dragon capsule is NASA’s sole US vehicle capable of transporting astronauts to and from the International Space Station (ISS), making it a vital component of the US space program.
The feud raises critical questions about Trump’s willingness to retaliate against Musk, considering his history of intervening in government procurement processes and the fact that Musk previously led Trump’s initiative to streamline the federal government.
If Trump prioritizes punitive measures and cancels substantial SpaceX contracts with NASA and the Pentagon, it could impede US advancements in space exploration.
Nasa press secretary Bethany Stevens refrained from commenting directly on the situation involving SpaceX, but assured that the agency would continue collaborating with its industry partners to meet presidential objectives in the realm of space.
The Musk-Trump conflict has disrupted a previously strong partnership between the government and Musk, which had led to numerous benefits for SpaceX. These include a shift in NASA’s lunar ambitions towards a focus on Mars, a proposed space-based missile defense system, and the appointment of an Air Force leader who favored SpaceX for a contract.
Decommissioning the Dragon would likely disrupt the ISS program, which relies on a collaboration of numerous countries established over two decades. However, it remains unclear how quickly such a decommissioning would take place, especially since NASA has relied on Russia’s Soyuz spacecraft as a backup to transport astronauts to the ISS.
SpaceX’s Ascendancy
SpaceX established itself as a leader in the aerospace sector well before Musk’s involvement in Republican politics last year, securing a strong foothold in the rocket launch and satellite communications markets. Analysts suggest that this dominance could offer the company some level of protection amid Musk’s fallout with Trump.
Justus Parmar, CEO of Fortuna Investments, which has invested in SpaceX, noted, “While it wouldn’t lead to catastrophic results, as SpaceX has become a global powerhouse, it will undoubtedly result in substantial revenue losses and missed opportunities for contracts.”
Under Trump’s administration, the US space industry has faced uncertainty, with NASA’s workforce of 18,000 impacted by potential layoffs and proposed budget cuts jeopardizing numerous scientific programs. Adding to this confusion, the space agency currently lacks a confirmed administrator.
The abrupt removal of Musk’s ally, billionaire private astronaut Jared Isaacman, from consideration for NASA administrator was seen as an early consequence of the Musk-Trump rift. Trump cited Isaacman’s political contributions to Democrats as a reason for his removal, despite Isaacman having supported candidates from both parties.
Musk’s ambitions to send humans to Mars have also posed challenges for Trump’s space strategy, which has often diverted attention from missions aiming to return humans to the moon.
Trump’s budget proposal aimed to cut funding for Artemis moon missions beyond its third launch, potentially ending plans for the Space Launch System rocket linked to those missions.
Nevertheless, the Senate Commerce Committee’s version of Trump’s budget, released late Thursday, includes provisions to restore funding for the fourth and fifth Artemis missions, promising at least $1 billion (around Rs. 8,574 crore) annually for the Space Launch System through 2029.
Given that SpaceX’s rockets present a more cost-effective alternative to SLS, the Trump administration’s response to the Senate’s proposed changes in the coming weeks may reveal how much political influence Musk still holds.
Founded in 2002, SpaceX has secured $15 billion (approximately Rs. 1,28,621 crore) in contracts from NASA for the Falcon 9 rockets and the development of the Starship, intended to facilitate lunar landings for astronauts within this decade.
The company has also been awarded substantial funds to deploy a majority of the Pentagon’s national security satellites while constructing a significant constellation of spy satellites for a US intelligence agency.
Former NASA Deputy Administrator Lori Garver cautioned that terminating SpaceX’s contracts could be detrimental to US interests and might not be legally permissible. However, she also expressed concern over Musk’s threats, stating that “a rogue CEO threatening to decommission spacecraft, putting astronauts’ lives at risk, is untenable.”
© Thomson Reuters 2025
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
