Elon Musk’s sweeping cuts to US government agencies have sparked concerns that private companies—including his own—could reap billions in new contracts as public services are dismantled.
Musk, who has taken on a powerful role in the Trump administration, has vowed to oversee the mass downsizing of federal agencies, arguing that many should be “deleted entirely.” But while the cuts are being framed as a drive for efficiency, they could end up funnelling lucrative contracts to private firms—including Musk’s SpaceX and Starlink, which already hold multi-billion-dollar deals with the US government.
The restructuring comes as Musk pushes for the adoption of artificial intelligence in government operations and a complete overhaul of US weapons programmes—an area where private defence contractors are eager to step in.
Private sector sees opportunity
Musk’s cost-cutting agenda has already been praised by Silicon Valley and defence firms, which see an opportunity to expand their influence as government functions are outsourced.
Palantir, the data analytics company with hundreds of millions in US military contracts, has been particularly vocal about the changes. On a recent earnings call, Palantir CTO Shyam Sankar lauded Doge for bringing “meritocracy and transparency” to government operations, adding that it would eliminate wasteful software projects.
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