SpaceX wins $2.29B Space Force contract for military satellites ahead of planned IPO

May 26-SpaceX has landed a $2.29 billion deal with the U.S. Space Force to build a satellite network for military communications and President Donald Trump's "Golden Dome" missile defense project.

The contract, which appears to be the largest military satellite contract to date for Elon Musk's space firm, comes weeks before the Starbase-based company is set to go public in what could be the largest-ever initial public offering.

The work will likely go to SpaceX subsidiary Starlink, which provides satellite internet service around the world and is the company's biggest moneymaker. Starlink already operates Starshield, a secure network for the U.S. government and military.

Under the deal announced Tuesday, SpaceX will develop a constellation of hundreds of satellites in low-Earth orbit to provide connectivity for data and communications. An operational prototype is due by the end of next year.

The program, to be known as the Space Data Network Backbone, will act "as a core communications layer for the (Space Force's) warfighting systems, ensuring our sensors and shooters are connected continuously, globally and securely," Space Force Col. Ryan Frazier said in a statement.

The service began talking about the program in 2024, and Golden Dome program lead Gen. Michael Guetlein said in March that it's part of the controversial and pricey missile defense system, according to Breaking Defense, a news site focusing on global defense technology.

According to the Space Force, the deal will grow the existing network with "an expanded optically interconnected mesh of satellites delivering worldwide tactical communications and broadband communication services."

The contract was made under so-called Other Transaction Authorities, which fall outside of federal acquisition guidelines. The Pentagon has increasingly used the authority over the past decade to acquire new technologies from non-traditional defense contractors.

While such contracts are faster and more flexible, the Government Accountability Office has raised oversight concerns and called for the Pentagon to track "critical information about (Other Transaction Authorities) that could help decision-makers determine whether they're working as intended."

"We aren't trading speed for scale; we are demanding both," the Space Force has said. "By using rapid prototyping and Other Transaction Authorities, we are ensuring our advanced solutions are integrated and delivered to the warfighter as fast as possible."

SpaceX hasn't commented on the deal.

In a preliminary registration statement filed last week with the Securities and Exchange Commission ahead of its IPO, SpaceX said its connectivity business, "primarily driven by Starlink," generated revenue of nearly $11.4 billion in 2025.

By comparison, SpaceX's space business had revenue of about $4.1 billion but $657 million in losses. And its newly formed artificial intelligence segment had $3.2 billion in revenue and almost $6.4 billion in losses.

SpaceX also holds billions in Pentagon contracts for cargo space on its rockets as well as for its Starlink and Starshield services. Prior to Tuesday's announcement, the largest was a classified satellite network using Starshield for the National Reconnaissance Office that reportedly cost $1.8 billion.

Starlink, which builds satellite internet terminals and other components in Bastrop, currently has 10.3 million subscribers across 164 countries and other markets, according to last week's filing. It also provides satellite-to-mobile texting and over-the-top voice services to 7.4 million devices across 30 countries each month.

In April, the Space Force awarded SpaceX and 11 other companies 20 contracts worth a combined $3.2 billion to develop "space-based interceptors" as part of the larger Golden Dome program. Like the Space Data Network, it was awarded under Other Transaction Authorities.

Separately, the Missile Defense Agency named 2,440 businesses across the country, including at least 20 based in Texas or with a major presence in the state, as vendors under a contract that could be worth $151 billion for Golden Dome work over 10 years.

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