SpaceX stock sees brief Pentagon AI bump, while CoreWeave slides on pricing threat
SpaceX caught a fleeting intraday bid Friday afternoon, paring some losses after the Wall Street Journal reported the aerospace giant is in talks to supply billions of dollars in AI computing power to the Pentagon. However, the spike was short-lived and offered little respite from the stock’s recent weakness, with shares ultimately remaining down 4.4%.
The real market action happened elsewhere. While SpaceX investors largely faded the headline, traders zeroed in on a critical detail in the report: SpaceX’s plans to aggressively undercut existing cloud-compute pure plays. Sources noted that SpaceX employees have discussed competing directly with providers like CoreWeave by offering AI capacity at significantly lower price points. That commentary immediately dragged CoreWeave’s shares into negative territory as the market priced in the threat of a margin-crushing price war.
The proposed multi-billion-dollar Pentagon deal would carve out dedicated data-center capacity for the Defense Department to run AI models. While talks are ongoing and could still fall apart, an agreement would deepen an already entrenched relationship. The Pentagon currently relies heavily on SpaceX for rocket launches, satellite communications, and missile tracking. Expanding that reliance into AI infrastructure will likely amplify existing concerns among national-security officials regarding the military’s outsized dependence on Elon Musk’s services.
The negotiations come as the Defense Department races to lock down secure cloud-computing power for divisions like the National Security Agency and active warfighters deploying AI in their operations. It is an escalating arms race among major tech players: Amazon is pouring $50 billion into government-focused capacity, while Microsoft, Google, and Oracle remain heavily entrenched as prime cloud suppliers. With this latest move, SpaceX is signaling it wants a bigger piece of that pie — and is willing to disrupt the broader market to get it.
