US President Donald Trump has threatened to terminate contracts with businesses operated by Elon Musk after the two billionaires abruptly fell out.

Among contracts potentially impacted are those for SpaceX's Starlink Internet service.

After spending more than $250 million on Trump's re-election, Musk joined the administration in January, heading up the controversial DOGE effort to cut government costs.

Musk left in May, with both parties saying it was due to his term as a special adviser coming to an end. However, soon after his departure, Musk began criticizing the 'Big, Beautiful Bill,' Trump's signature budget reconciliation bill that is expected to dramatically increase the US debt by $2.5-3.1 trillion.

After the bill passed the House of Representatives, Musk called it a "disgusting abomination" on his social media platform X, and became increasingly critical of his former ally.

Trump, who claimed that the change in relations was due to the bill removing an electric vehicle mandate, said on his own social media platform: "The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon's Governmental Subsidies and Contracts. I was always surprised that Biden didn't do it!"

A Washington Post report in February found that Musk's businesses had received $38 billion in government funding across Tesla, SpaceX, and its subsidiary Starlink. That figure is based on public contracts and does not include defense and intelligence work for the federal government.

A further 52 ongoing contracts with seven government agencies were on track to potentially pay Musk’s companies an additional $11.8 billion. At the time, it was believed that the companies would benefit from Musk's proximity to power - with Starlink close to winning a $2.4 billion contract from the Federal Aviation Administration (FAA) at the expense of Verizon.

"In light of the President’s statement about cancellation of my government contracts, SpaceX will begin decommissioning its Dragon spacecraft immediately," Musk said in a response, which was followed by claims that Trump is in the Epstein files. Update: Musk later walked back the threat.

The vehicle is used for supply and crew missions to the International Space Station.