Elon Musk announced that government contracts will represent less than 10% of SpaceX's revenue this quarter, continuing a downward trend from previous years as the company's business focus shifts toward AI computing services.
- Government contracts fell to less than 10% of SpaceX revenue this quarter
- AI computing rentals now the primary revenue driver, with Anthropic leading
- Government share expected to drop below 5% within a year
What happened
Elon Musk revealed that government contracts, which previously comprised about a fifth of SpaceX’s revenue in 2025 and 16.6% in the third quarter, have dropped below 10% this quarter. This reflects a significant shift in SpaceX’s revenue composition away from traditional government launches for NASA and the Pentagon.
Instead, most of SpaceX’s revenue now comes from its AI computing division. In the third quarter, it earned $7.56 billion primarily by renting out computing power from its data centers, particularly its facility in Memphis. Anthropic, an AI startup, accounted for 34.5% of SpaceX’s income, making it the largest customer in this segment.
Why it matters
This transition marks a strategic pivot for SpaceX, traditionally reliant on government contracts for launches of astronauts and national security satellites. Now its financial health increasingly depends on the AI sector, which brings new business risks, including customer concentration and a volatile market sentiment toward AI compute rentals.
Anthropic’s contracts can be terminated with just 90 days’ notice starting in early 2027, adding uncertainty. Additionally, the November 2026 U.S. congressional shift to Democratic control could challenge SpaceX’s government relations, especially after Elon Musk spent heavily supporting losing Republican candidates.
What to watch next
Investors and analysts will closely monitor SpaceX’s ability to diversify its AI computing revenue and secure longer-term contracts, reducing reliance on a single customer like Anthropic. Market confidence in AI compute rental businesses will also impact the sustainability of this revenue stream.
Meanwhile, SpaceX’s government contracts, including its ongoing NASA project to land astronauts on the Moon with the Starship vehicle as soon as 2028, remain important. The evolution of government spending levels and congressional relationships will influence how critical government contracts continue to be to the company’s future.