SpaceX and xAI are set to compete in a secretive Pentagon initiative focused on advanced drone technology, according to a report by Bloomberg News. The contest centres on the development of voice controlled, autonomous drone swarming systems.
Bloomberg cited people familiar with the matter who said the companies will take part in the challenge. However, neither SpaceX nor its wholly owned subsidiary xAI responded to requests for comment. The Pentagon’s defence innovation unit also declined to comment. Reuters could not independently verify the report.
Secret Pentagon Challenge
The reported competition began in January and carries a prize fund of 100 million dollars. Organisers have selected only a small group of participants, and Elon Musk’s companies are said to be among them.
The six month contest aims to produce technology that can translate spoken commands into digital instructions. These instructions would then control multiple drones at once. As a result, developers must combine artificial intelligence with advanced robotics to create coordinated drone swarms.
This initiative forms part of broader efforts within the US defence sector to modernise military capabilities. In particular, officials want faster and more flexible drone systems that can respond to real time instructions.
SpaceX And xAI Collaboration
SpaceX, based in Texas, recently acquired xAI. The deal brought together Musk’s space and defence contractor with his artificial intelligence start up. The acquisition took place ahead of SpaceX’s planned initial public offering later this year.
Through this merger, SpaceX gained direct access to xAI’s expertise in advanced machine learning. Consequently, the combined entity may hold a strategic advantage in a competition that relies heavily on AI driven systems.
Previously, Musk joined other AI and robotics researchers in signing an open letter in 2015. The letter called for a global ban on offensive autonomous weapons. The signatories argued against creating new tools designed to kill people.
Wider US Drone Strategy
Meanwhile, the US Defence Secretary outlined a strategy last year to accelerate drone development and deployment. The plan seeks to reduce bureaucracy and strengthen domestic drone manufacturing.
At the same time, US authorities continue to search for safe and cost effective ways to neutralise drones. This concern has grown more urgent ahead of major events such as the FIFA World Cup and the America250 anniversary celebrations this summer.
In addition, the Pentagon has expanded its engagement with leading AI companies. Last year, OpenAI, Alphabet’s Google, Anthropic and xAI secured contracts worth up to 200 million dollars each. These agreements aim to scale up the adoption of advanced AI capabilities within the department.
Inputs from Reuters

