HAWTHORNE, Calif. — SpaceX's business has grown so fast on the commercial side that government work is becoming a rounding error. Elon Musk said Friday that federal contracts will account for less than 10 percent of SpaceX revenue in the current quarter and could shrink to around 5 percent over the next year — a sign of how thoroughly Starlink and the company's compute business have reshaped its books.
The comments, made on X, underscore a shift that has been building for months. SpaceX reported that government contracts — largely NASA launches and Pentagon work — made up 16.6 percent of revenue last quarter, already a minority share. Musk's projection would cut that in roughly half again.
A Customer Base That Outgrew Washington
The engine of that change is commercial demand. Starlink's consumer and enterprise subscriptions have scaled worldwide, and SpaceX's move into AI infrastructure has added enormous new customers. According to recent reporting, Anthropic has passed the U.S. federal government to become SpaceX's single largest customer, anchored by a compute agreement that Anthropic's IPO filing valued at up to $120.5 billion through 2029.
That is the backdrop to Musk's confidence. When a private AI lab is writing checks of that size, federal launch contracts simply matter less to the overall mix — a dynamic that fits Musk's broader vision of moving vast amounts of AI compute off the ground.
"Best Product And the Lowest Price"
Musk framed the government relationship as one SpaceX is happy to have but does not depend on. "SpaceX contracts with the government are BOTH the best product AND the lowest price," he wrote, adding, "Happy to cancel any that the government doesn't want. Just say the word." The message: SpaceX wins federal business on merit, and its commercial momentum means it is not beholden to any single customer.
The company's commercial ambitions keep widening. Beyond launch and compute, SpaceX has been pushing Starlink deeper into mainstream connectivity, including a regulatory path for its direct-to-phone spectrum plans.
Independence as a Strength
For a company that was once heavily dependent on NASA to survive, the inversion is striking. SpaceX now has the financial base to fund Starship, Starlink expansion, and orbital compute largely on the strength of commercial revenue. That independence gives it room to invest aggressively through political cycles without waiting on appropriations.
Musk's bottom line was that SpaceX will keep serving government customers where it offers the best value — but its future is being written by the private market. More on the company is available at SpaceX.com, and the next few quarters will show just how small the government slice becomes.