July 17 (Reuters) – Elon Musk’s SpaceX is in talks to provide the U.S. Department of Defense with access to data center capacity worth billions of dollars to run AI models, the Wall Street Journal reported on Friday, citing people familiar with the matter.
Such an agreement would extend the Pentagon’s existing relationship with SpaceX, a key partner for rocket launches and satellite-based communications and missile tracking.
According to the report, SpaceX employees have discussed plans to compete more directly with neocloud firms such as CoreWeave by selling computing capacity to AI customers at lower prices.
Like many large enterprises, the Defense Department is moving to secure additional cloud-computing capacity to support intelligence agencies and military AI applications.
Amazon said late last year it would invest up to $50 billion to expand AI and supercomputing capacity for U.S. government customers through its Amazon Web Services cloud business.
Discussions between SpaceX and the Pentagon are ongoing and could still fall apart, WSJ reported.
SpaceX and the Pentagon did not immediately respond to Reuters requests for comment. Reuters could not independently verify the report.
The space firm has made similar deals in recent months. In June, SpaceX signed a multi-year cloud services agreement with Alphabet’s Google, providing access to about 110,000 Nvidia chips and related computing infrastructure.
Anthropic said in May it had struck a deal to use the full computing power of SpaceX’s Colossus 1 facility in Memphis, gaining 300 megawatts of new capacity.
(Reporting by Anhata Rooprai in Bengaluru; Editing by Pooja Desai)
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