SpaceX to join Pentagon contest for autonomous drone technology

Elon Musk's SpaceX and xAI are set to compete in a secret Pentagon contest to develop voice-controlled autonomous drone swarming technology, according to a report. The $100 million prize challenge, launched in January, will run for six months. The companies and the Pentagon's defense innovation unit did not respond to comment requests.

According to a Bloomberg News report on Monday, February 16, Elon Musk's Texas-based SpaceX and its wholly-owned subsidiary xAI are among a select few companies chosen for a new Pentagon contest. The initiative seeks to develop advanced swarming technology that translates voice commands into digital instructions to operate multiple drones simultaneously.

SpaceX recently acquired xAI in a deal that merged Musk's primary space and defense contractor with his artificial intelligence startup, occurring ahead of SpaceX's planned initial public offering this year. The competition, run by the Pentagon's defense innovation unit, offers a $100 million prize and began in January for a six-month duration.

Musk joined AI and robotics researchers in signing an open letter in 2015 calling for a global ban on 'offensive autonomous weapons,' warning against creating 'new tools for killing people.' In contrast, the US Defense Secretary outlined a strategy last year to speed up drone development and deployment by reducing bureaucracy and supporting domestic manufacturing.

The US is also pursuing safe and cost-effective methods to counter drones, particularly near airports and major sporting events, with heightened urgency ahead of this summer's FIFA World Cup and America250 anniversary celebrations. Additionally, OpenAI, Alphabet's Google, Anthropic, and xAI secured contracts last year worth up to $200 million each to expand advanced AI use in the Pentagon. Reuters could not independently verify the Bloomberg report.

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Elon Musk announced on February 2, 2026, that his SpaceX company has acquired his AI startup xAI, aiming to build orbital data centers to meet surging electricity demands for artificial intelligence. The merger integrates AI, rockets, and satellite technology to create a vertically integrated innovation engine. Musk envisions this enabling advancements like Moon bases and Mars colonization.

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After Anthropic CEO Dario Amodei said in late February that the company would not allow its Claude model to be used for mass domestic surveillance or fully autonomous weapons, senior Pentagon officials said they have no intention of using AI for domestic surveillance and insist that private firms cannot set binding limits on how the U.S. military employs AI tools.

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US President Donald Trump has directed all federal agencies to immediately cease using Anthropic's AI tools amid a dispute over military applications. The move follows weeks of clashes between Anthropic and Pentagon officials regarding restrictions on AI for mass surveillance and autonomous weapons. A six-month phase-out period has been announced.

Elon Musk is reportedly considering a merger between SpaceX and Tesla, or a tie-up with xAI, as the rocket company prepares for a possible $1.5 trillion stock market flotation. The discussions highlight synergies in AI, robotics, and space technology, while drawing attention to the companies' combined bitcoin holdings of nearly 20,000 BTC. Legal entities suggestive of merger activity were filed in Nevada earlier this month.

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Anthropic's CEO Dario Amodei stated that the company will not comply with the Pentagon's request to remove safeguards from its AI models, despite threats of exclusion from defense systems. The dispute centers on preventing the AI's use in autonomous weapons and domestic surveillance. The firm, which has a $200 million contract with the Department of Defense, emphasizes its commitment to ethical AI use.

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