FWIW, it's unclear how the NSF ends up. Musk needs scientists to make rockets go. The defense industry needs a broad spectrum of scientists to make all kinds of things happen. Scientists (and especially the schools producing said scientists) need funding to operate, or there will no longer be accredited scientists.
Does Musk understand this? Maybe not. It's not evident so far. He certainly lives in a fictional world of the right wing's devising. Will someone else be able to penetrate that bubble to make him understand it? Will he care if they do? Guess we'll find out.
Why do all schools need public money? The big ones have huge endowments, why not use those? They also make a ton of money from students. Much of it is wasted on layers of administrators, but the administrators will just fire the scientists for not bringing in grants