Musk-Trump breakup puts billions in SpaceX contracts at risk, jolting US space program

WASHINGTON (Reuters) -The fate of roughly $22 billion worth of SpaceX's government contracts is at risk and multiple U.S. space programs face looming changes in the fallout of a worsening fight between Elon Musk and U.S. President Donald Trump, an explosive breakup over the administration's spending bill.

Disagreement spiraled quickly into fighting and chaos on Thursday after Trump lashed out at Musk in comments in the Oval Office. As Musk launched a series of missives on X, Trump threatened to terminate government contracts with companies owned by Musk, who in response said his space company "will begin decommissioning its Dragon spacecraft immediately."

SpaceX's Dragon capsule is the only U.S. spacecraft capable of sending astronauts to and from the International Space Station. NASA has relied on the spacecraft since 2020 under a contract with SpaceX worth $5 billion, one of many arrangements making Musk's space company a dominant element of the U.S. space program.

NASA did not immediately return a request for comment.

The feud has raised questions about how far Trump, an often unpredictable force who has politically intervened in past procurement efforts, is willing to go to punish Musk, such as whether the president would prioritize exacting political retaliation at the cost billions of dollars worth of SpaceX contracts that NASA and the Pentagon view as crucial to maintaining U.S. space power status.

SpaceX has won $15 billion worth of contracts from NASA as the agency relies on Dragon, puts many of its science payloads and spacecraft on the company's Falcon 9 rocket and helps fund development of SpaceX's Starship, which is poised to land NASA astronauts on the moon this decade.

At the Pentagon, SpaceX's rocket launch business is crucial for putting national security satellites in space. SpaceX's military satellite unit is building a massive spy constellation in orbit for a U.S. intelligence agency.

Taking Dragon out of service would likely disrupt the ISS program, which involves dozens of countries under a two-decade-old international agreement, but it was unclear how quickly such a decommissioning would occur.

Musk has been looking to retire Dragon for years in order to prioritize Starship as the company's flagship human spaceflight vessel. In 2022, SpaceX opted to halt Dragon production, capping its fleet at four before NASA urged the company to build more as Boeing's Starliner capsule struggles in development.

(Reporting by Deborah Sophia in Bengaluru; Editing by Pooja Desai, David Gregorio and Sandra Maler)