White House hints that Trump doesn't want Elon Musk's xAI to have federal contracts

The relationship between President Donald Trump and tech mogul Elon Musk, once marked by close collaboration, faces new tensions after statements from the White House suggested that Trump does not support federal agencies contracting with xAI, Musk's artificial intelligence company.

During a press conference on Wednesday, White House Press Secretary Karoline Leavitt was asked whether the president supports federal agencies working with xAI. Her answer, a terse "I don't think so, no," generated surprise, especially considering the recent Pentagon announcement about the xAI contract.

And when asked if Trump would seek to cancel existing contracts, Leavitt replied, "I'll talk to him about it," leaving the possibility of future action open.

The rift between Trump and Musk

The rift between the president and Musk, whose political alliance lasted nearly a year, fractured in June due to disagreements over the then-budget bill known as the "Big Beautiful Bill."

The "Big Beautiful Bill," now signed into law, has been a central sticking point. Musk, who until late May led the Department of Government Efficiency (DOGE), publicly criticized the legislation for its impact on the federal deficit.

The criticism then escalated into a public spat, with Trump threatening to review federal contracts for Musk's companies, including SpaceX, and Musk responding with accusations and threats to dismantle key assets such as the Dragon spacecraft.

Despite these tensions, SpaceX maintains strategic contracts with the Department of Defense and NASA, deemed "irreplaceable" following an internal review ordered by Trump in June.