Hegseth pushes for faster military tech and more AI during SpaceX visit

The U.S. Department of War Secretary Pete Hegseth visited SpaceX near Brownsville on Monday to highlight the American manufacturing sector as part of his federal Arsenal of Freedom tour. 

SpaceX is building a $250 million Gigabay industrial manufacturing facility, slated to build Starship rockets, and recently snagged a massive military contract for missile-tracking systems. 

Billionaire CEO Elon Musk showed Secretary Hegseth the manufacturing facility that builds and tests rockets. 

“We just did a tour of the factory, and I think it really helps illustrate how manufacturing at scale is critical to the strength of America,” Musk told the crowd of employees and Texas officials, including U.S. Senator John Cornyn. 

SpaceX estimated it would generate more than $13 billion in gross economic output for Cameron County and support 24,000 local jobs through 2026. 

In 2024, Space Exploration Technologies Corp. relocated its headquarters from California to the future city of Starbase, Texas, which was incorporated in May 2025. 

“This is a city. It’s actually, legally, a city that, thanks to the hard work of the SpaceX team, we built out of nothing and is now a gigantic rocket manufacturing system,” Musk said. 

Federal government contracts

The National Aeronautics and Space Administration has awarded SpaceX more than $17 billion in federal contracts since 2008, according to contract data on USA Spending. 

The Department of War has awarded SpaceX more than $7 billion since 2008, making it the second-largest portion of the company’s unclassified federal business. 

The Department of War’s classified budget is not available for review. 

On Friday, the U.S. Space Force’s Space Systems Command awarded SpaceX an additional $739 million contract to help the agency improve its missile warning and missile tracking capability. Officials noted that cost efficiency and speed were priorities for the agency. 

President Donald Trump has pushed for more domestic manufacturing during his tenure. It was something former President Biden signed an executive order to accomplish as well, but restructuring a global supply chain is no easy task.

Defense contractor strategy shift

Hegseth took a whirlwind trip across Texas, including a visit to the Lockheed Martin facility in Fort Worth, and administered the oath of enlistment to new troops in Irving. 

“For too long under previous administrations, we thought we could outsource those capabilities to other countries. Under President Trump, well, those days are over,” Hegseth said in Fort Worth. “If you want American strength, you’d better have American manufacturing.” 

Hegseth said the U.S. is rebuilding its military force. 

“That’s why we’re here in Texas. We’re going to go across the country over the next couple of months, talking to companies, to industry, manufacturing, large and small. We need them all,” he said.

The goal is to “overturn the entire way we do business,” he said. “To ensure that we get the 85% solution, the best of the best in the hands of the warfighter as quickly as possible, as opposed to waiting years and years and spending tens of billions of dollars for the perfect solution.” 

A streamlined system with AI

At Starbase, Hegseth lauded Musk’s leadership and focus on speed to market. 

“We can no longer afford to wait a decade for our legacy prime contractors to deliver the next perfect system, only to find that it’s delivered years behind schedule and costs ten times what it should,” Hegseth said. “Winning requires a new playbook. Elon wrote it with his algorithm. Question every requirement, delete the dumb ones, and accelerate like hell.” 

Hegseth also announced that Musk’s artificial intelligence company xAI tool Grok, will be used on the U.S. Department of War’s network — both classified and unclassified. The department already uses Google’s Gemini AI tool across 3 million users. The value of the Grok contract was not disclosed. 

“Military AI is going to be a race for the foreseeable future where the risk to U.S. national security of moving too slowly outweigh the impacts of imperfect alignment,” Hegseth said. 

More pressure from the federal government on defense contractor timelines may be an issue, as SpaceX has faced delays in delivering its Starship lunar lander. A former NASA administrator warned SpaceX last year that the federal government was not willing to hold up the mission for one company and threatened to open the contract to competitors. 

NASA’s new head, Jared Isaacman, a billionaire entrepreneur himself, was the first civilian to perform a spacewalk on a SpaceX mission he self-funded.