Trump Administration Reviews SpaceX Contracts Amid Musk Feud, But Finds Firm ‘Too Critical to Drop’

Following a public fallout between Elon Musk and President Donald Trump, the Trump administration quietly initiated a review of SpaceX’s federal contracts, The Wall Street Journal reported Sunday.

The goal was to examine billions in agreements for potential waste, but officials quickly concluded that SpaceX’s role in U.S. defense and space operations made most of the contracts indispensable.

While Musk and SpaceX have stayed silent, administration sources told the Journal that many of the deals, particularly those involving the Department of Defense and NASA, are simply too vital to cancel.

The scope of the review extended beyond SpaceX. A White House official confirmed to the Journal that other companies with major federal contracts were also assessed during the process.

The review was triggered in early June when Musk began openly criticizing Trump’s tax-and-spending policies on social media. The exchanges escalated, with Trump posting on Truth Social on June 5 that one way to cut government waste would be to “terminate” contracts held by Musk’s companies.

Just days later, on June 9, Federal Acquisition Service Commissioner Josh Gruenbaum requested a full breakdown of SpaceX’s contracts from the Department of Defense. NASA and at least five other agencies were also asked to compile detailed spreadsheets, dubbed “scorecards,” which included contract values and assessments of whether rival firms could deliver the same services.

But the Pentagon and NASA quickly determined that the majority of SpaceX’s contracts could not be replaced. Although some agreements may face continued review, officials acknowledged that a large-scale cancellation wasn’t realistic.

Musk once had a close working relationship with Trump, including a key role in a task force aimed at cutting federal spending. But that alliance has unraveled.

Trump’s decision to publicly question SpaceX’s funding marked a rare rebuke of a central government contractor. However, the administration’s review process soon highlighted the limitations of such political moves.

During the contract review, SpaceX President Gwynne Shotwell met privately with White House officials. While details of those discussions remain undisclosed, her visit signaled how seriously the administration was treating the matter.

One of the clearest takeaways from the review was the U.S. government’s deep reliance on SpaceX. The company leads the commercial launch sector, with its reusable Falcon rockets routinely carrying military and civilian payloads into space. Its Crew Dragon capsule remains the only U.S. spacecraft currently approved to carry astronauts to the International Space Station.

In May, SpaceX launched an upgraded GPS satellite for the U.S. Space Force. Just a month earlier, the Pentagon awarded the company a \$5.9 billion contract for 28 national-security launches—more than any other bidder. Another crewed NASA mission using Crew Dragon is scheduled for later this month.

Still, the dependence isn’t one-sided. During the height of the Trump–Musk clash, Musk threatened to ground Crew Dragon, a move that sparked concern at NASA. Though he later backtracked, the episode underscored SpaceX’s unique leverage.

Despite government efforts to foster more competition in space and satellite contracts, no other company currently rivals SpaceX in scale or capability. Some agencies are urging competitors to accelerate development, but setbacks and delays have hindered progress.

SpaceX, for its part, insists its success is earned. “We win these contracts by offering the best prices and executing,” Shotwell said at a November investor event.

Meanwhile, the company continues to expand. Its Starlink satellite internet network now serves various government entities, and its Starshield division has landed classified deals with U.S. intelligence agencies.