Elon Musk’s SpaceX and wholly owned subsidiary xAI are competing in a secretive new Pentagon contest to produce voice-controlled, autonomous drone swarming technology, according to people familiar with the matter.

The entry of the two Musk companies — which he announced in early February would merge – into a new frontier of AI-enabled weapons development marks a new and potentially controversial departure for Musk. While SpaceX is a well-established defense contractor and Musk is enthusiastic about advancing AI, he is among those who have also previously argued against making “new tools for killing people.”

Musk’s companies are among only a handful that were selected to compete on the $100 million prize challenge launched in January, according to people familiar with the matter, who requested anonymity to discuss sensitive topics. SpaceX and xAI’s involvement hasn’t previously been reported.

SpaceX and xAI didn’t respond to requests for comment.

The six-month competition aims to produce advanced swarming technology that can translate voice commands into digital instructions and run multiple drones.

While it’s already possible to fly multiple drones at once, developing the software to direct multiple drones on sea and in the air as a swarm — which can move autonomously in pursuit of a target — remains a challenge. The contest will progress in phases, depending on the success and interest of the participants, the people said.

The Pentagon competition was launched jointly by the Defense Innovation Unit, which is devoted to bringing in Silicon Valley startups, and the Defense Autonomous Warfare Group — a new element launched under the second Trump administration that is part of US Special Operations Command. DAWG is partly continuing the work of the Biden-era Replicator intitiative, which sought to produce multiple thousands of expendable autonomous drones.

DIU didn’t respond to a request for comment. Special Operations Command, which runs DAWG, declined to comment.

The effort is set to develop in five phases, starting with developing software and progressing to real-life testing. A defense official indicated in the January announcement of the contest that the drones will be used for offensive purposes, saying the human-machine interaction “will directly impact the lethality and effectiveness of these systems.”

Security clearances

xAI has recently embarked on a hiring spree to recruit engineers out of Washington or the West Coast with active U.S. security clearance at the “secret” or “top secret” levels to work with federal contractors, according to the company’s website. It’s looking for software engineers who are used to working with “government agencies, DoD, or federal contractors on AI, software or data projects,” it said in a job posting, adding the hiring process would be complete within a week.

The company has already signed contracts with the Pentagon to integrate its Grok chatbot into the government sites to “empower military and civilians,” xAI said in December. It had previously secured a $200 million contract with the Pentagon to integrate xAI into military systems.

Although SpaceX is a longtime defense contractor, the company has focused on making reusable space rockets and satellites for space exploration, military communications and intelligence systems, rather than software for offensive weapons. SpaceX, along with Boeing Co. and Lockheed Martin Corp., are the U.S.’s providers of rockets for launching the Pentagon’s most sensitive satellites.

Musk has previously argued for a ban on offensive autonomous weapons that can select and engage their own targets and operate beyond meaningful human control.

In 2015, Musk signed on to an open letter from AI and robotics researchers that warned against the perils of autonomous weaponry.

xAI, which Musk started in 2023, owns Musk’s AI startup, the social network X and the Grok chatbot. The company, which just weeks ago agreed to merge with SpaceX in a deal valued at $1.25 trillion, is saddled with billions of dollars in debt, besieged by well-funded rivals and faces mounting regulatory scrutiny after its chatbot spread sexualized images. It also brings in scant revenue compared to SpaceX.

When the two agreed to merge, a statement from Musk on the SpaceX website said the company had acquired xAI to “form the most ambitious, vertically-integrated innovation engine on (and off) Earth, with AI, rockets, space-based internet, direct-to-mobile device communications and the world’s foremost real-time information and free speech platform.”

Musk said nothing about combining the two companies to deliver AI to provide software to underpin novel weapons technology. But the new Pentagon undertaking, which will involve engineers and managers from both xAI and SpaceX, will push to do just that.

The first phase of the competition would focus only on software development, before using live platforms later. The software is intended to coordinate drone movements across multiple domains, such as by air and sea, according to a Pentagon description of the task. Later stages call for developing “target-related awareness and sharing” and ultimately “launch to termination.”

xAI isn’t the only advanced AI company working on the new Pentagon effort. OpenAI is supporting a successful submission from Applied Intuition, Bloomberg previously reported, citing the submission bid and people familiar with the matter.

OpenAI will limit its contribution to the project solely to the “mission control” element that will convert voice and other instructions from battlefield commanders into digital instructions, according to the submission document reviewed by Bloomberg. OpenAI’s technology wouldn’t be used for the operation of the drone swarm, weapons integration or targeting authority, Bloomberg previously reported.

A spokesperson for OpenAI said the company’s open-source technology was included in contest bids from two different existing partner companies and that OpenAI would ensure any use of its tools is consistent with its usage policy.

SpaceX and xAI are, by contrast, expected to work on the entire project together, according to people familiar with the matter.

The prospect of integrating chatbots and voice-to-text commands in weapons platforms has alarmed even some defense officials, despite the Pentagon’s eagerness to accelerate the adoption of AI and autonomy, according to several of the people. They said it would be important to limit generative AI to translation and not allow it to control drone behavior.

Several of the people expressed concern about the risks if generative AI were used to translate voice into operational decisions without a human in the loop.

The move comes as employees at major labs have departed after voicing a range of other ethical concerns about the AI industry, even as leading generative AI companies push for revenue to support ongoing research and development. They include an OpenAI researcher who said she’s concerned about ads in ChatGPT, and a researcher at Anthropic who publicly resigned, raising broader concerns about AI development.

Large language models, which underpin chatbots such as OpenAI’s ChatGPT, are prone to bias and so-called hallucinations — meaning they can generate outputs that aren’t anchored in reality but which the AI can present as reliable.

The Pentagon’s new AI Acceleration Strategy, released in January, seeks to “unleash” AI agents for the battlefield, from planning military campaigns to targeting, potentially involving lethal strikes.

Defense contracts have historically been controversial inside consumer tech companies, including significant protests at Google in 2018 over the Pentagon effort named Project Maven that intended to use AI to analyze drone footage.

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(With assistance from Carmen Arroyo, Loren Grush and Tony Capaccio.)

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