Musk's SpaceX is building a network of spy satellites for the US intelligence agency.

WASHINGTON (Reuters) – SpaceX is building a network of hundreds of spy satellites under a secret contract with a U.S. intelligence agency, five sources familiar with the program said, demonstrating the deepening ties between the space company of billionaire entrepreneur Elon Musk and U.S. national security agencies.

The network is being built by SpaceX's Starshield business unit under a $1,8 billion contract signed in 2021 with the National Reconnaissance Office (NRO), an intelligence agency that manages spy satellites, the sources said.

The plans show the extent of SpaceX's involvement in US military and intelligence projects and illustrate a deeper Pentagon investment in vast low-Earth orbit satellite systems designed to support ground forces.

If successful, sources said the program would significantly increase the ability of the U.S. government and military to quickly identify potential targets virtually anywhere in the world.

The contract signals growing confidence on the part of U.S. government intelligence in a company whose owner has clashed with the Biden administration and generated controversy over the use of Starlink satellite connectivity in the war in Ukraine, the sources said.

The Wall Street Journal reported in February on the existence of a confidential $1,8 billion contract between Starshield and an unknown intelligence agency, without detailing the program's objectives.

A Reuters report reveals for the first time that SpaceX's contract is for a powerful new espionage system with hundreds of satellites capable of imaging the Earth and operating as a swarm in low Earth orbit, and that the spy agency Musk's company is working with is the NRO.

Reuters was unable to determine when the new satellite network will become operational and could not establish which other companies are part of the program with their own contracts.

SpaceX, the world's largest satellite operator, did not respond to multiple requests for comment regarding the contract, its role in it, and details about satellite launches. The Pentagon referred a request for comment to the NRO and SpaceX.

In a statement, the NRO acknowledged its mission to develop a sophisticated satellite system and its partnerships with other government agencies, companies, research institutions, and nations, but declined to comment on Reuters' findings regarding the extent of SpaceX's involvement in the effort.

"The National Reconnaissance Office is developing the most capable, diverse, and resilient space-based intelligence, surveillance, and reconnaissance system the world has ever seen," a spokesperson said.

Satellites can track targets on the ground and share that data with U.S. intelligence and military authorities, the sources said. In principle, this would allow the U.S. government to rapidly capture continuous images of ground activity virtually anywhere in the world, aiding military and intelligence operations, they added.

About a dozen prototypes have been launched since 2020, among other satellites on SpaceX's Falcon 9 rockets, three of the sources said.

All sources requested anonymity because they were not authorized to discuss the U.S. government program.