The White House has expanded its search for contractors to build the Golden Dome missile defense system, seeking to replace Elon Musk’s SpaceX following their recent fallout, according to a report by Reuters. The decision comes as tensions between the former allies escalate, with Trump threatening to strip Musk’s company of its government contracts over disputes regarding federal subsidies and the $5 trillion ‘big, beautiful’ budget plan.
Trump, who once supported Musk during the 2024 election campaign, has openly criticized his former ally’s financial dealings with the government. Musk’s opposition to Trump’s budget proposal, which includes unprecedented spending on national defense and infrastructure, led to Trump accusing Musk of profiting excessively from federal subsidies. This has prompted the administration to seek alternatives for the Golden Dome project, which is projected to cost $175 billion over its lifespan.
SpaceX has been a critical player in US defense communications through its Starlink and Starshield satellite systems. The company was initially expected to build key components of the Golden Dome, though the administration is now reportedly exploring other options to mitigate reliance on Musk’s firm. Potential contenders under consideration include Amazon’s Project Kuiper, which has only launched a fraction of its planned satellite constellation, as well as major defense contractors such as Northrop Grumman, Lockheed Martin, and L3Harris.
Smaller rocket startups including Rocket Lab and Stoke Space are also being evaluated as part of the administration’s efforts to diversify its sources for the project. However, SpaceX may still play a role in the Golden Dome program, particularly in satellite launches, given its extensive experience with Starlink deployments and established procurement processes.
The fallout between Trump and Musk has further intensified, with Trump suggesting that the Department of Government Efficiency (DOGE), which Musk formerly led, should investigate his government subsidies. Trump’s recent comments on Truth Social claimed that without subsidies, Musk would have to close his business and return to South Africa, arguing that the US could ‘save a fortune’ by cutting ties with his companies.
Musk responded to the allegations, warning that Trump’s spending plan would ‘bankrupt the country’ and announced his intention to launch a new political movement, the America Party, to challenge the current uniparty system in Congress. This development reflects the growing political and economic stakes in the dispute, as both parties seek to influence the direction of US defense spending and the future of key industries.
As the administration continues its search for alternative contractors, the outcome of this situation could have significant implications for the defense sector, national security strategies, and the broader political landscape in the United States. The competition for government contracts is expected to intensify, with potential shifts in funding and priorities that could reshape the aerospace and defense industries in the coming years.
For investors, the situation highlights the volatility of political decisions affecting major defense contracts and the potential for market shifts. Companies vying for these contracts, including Amazon, Northrop Grumman, and others, may see increased interest or uncertainty in their stock prices as the outcome of this bidding process unfolds. The financial stakes are high, with the potential for billions of dollars in contracts being redistributed in the event of a significant shift in the administration’s strategy.