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Elon Musk speaks with Donald Trump as they watch the launch of the sixth test flight of SpaceX’s Starship rocket last November in Brownsville, Texas. Getty Images The U.S. government spends hundreds of billions of dollars a year with defense companies. The Trump administration seems to think it deserves something more in return than goods and services: equity. The Defense Department is considering taking ownership stakes in defense contractors, Commerce Secretary Howard Lutnick said Tuesday in an interview on CNBC. The financing of munitions acquisitions needs rethinking, and Secretary of Defense Pete Hegseth and Undersecretary Stephen Feinberg “are on it,” Lutnick said. “The way it has been done has been a giveaway.” His comments, which came during a discussion on the U.S. government’s assumption of a stake in Intel, caught defense watchers by surprise. But major defense companies may be better able to fend off any government demands. For fast-moving SpaceX, allowing the government a seat at the owners’ table and inside scrutiny of how it operates might be particularly repellant for billionaire founder Elon Musk. And he may have stronger leverage than anyone to deny that. Unlike the ailing chipmaker and rare earths mine developer MP Materials, both of which gave the government equity stakes in return for badly needed funding, SpaceX and other major defense contractors have robust balance sheets. That even includes Boeing, which raised $24 billion in equity last year and has made substantial progress toward improving production of its commercial airplanes and straightening out troubled defense programs. If Trump started making eyes at companies like SpaceX or Lockheed Martin, it’s unclear that the administration has any legal authority to seize stakes “in perfectly healthy defense companies,” noted Todd Harrison, a defense analyst at the American Enterprise Institute. In June, when the president’s relationship with billionaire…

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Filed under: News - @ August 27, 2025 11:20 am