While SpaceX is often talked about mainly in the context of Starlink and commercial launches, news has now emerged that pushes the company further into the hard defense business. According to Bloomberg, SpaceX, together with its subsidiary xAI, is participating in a classified Pentagon competition to develop voice-controlled autonomous drones. It’s a six-month project with a prize of up to $100 million, aimed at technology that converts voice commands into digital instructions and can coordinate multiple drones at once.

This is interesting for several reasons. SpaceX recently absorbed xAI, effectively linking cutting-edge space and defense hardware with Musk’s own AI platform. If the company were to win such military contracts, it could significantly boost its valuation even before the IPO that’s being talked about for this year. Defense contracts also mean long-term cash flow and strategic positioning, which is a completely different league for investors than purely commercial space projects.

Paradoxically, Musk signed an open letter in 2015 against “offensive autonomous weapons.” Today his companies are participating in a competition precisely in that area.