Google Signs $920 Million Monthly Compute Deal With SpaceX Ahead of IPO
CNBC reported Friday that the SpaceX Google deal is worth $920 million per month, covering 32 months of AI compute access and arriving just days before SpaceX’s anticipated public market debut.
The Terms of the Google Agreement
According to a regulatory filing, Google will access roughly 110,000 Nvidia graphics processing units housed inside SpaceX’s data centers, alongside additional processors, memory, and related hardware. The arrangement runs from October this year through June 2029 at the headline rate. Capacity ramps up through September at a lower fee before the full rate kicks in.
SpaceX included a notable penalty clause. If the company cannot deliver the agreed GPU count by September 30, Google may exit the contract outright. Alternatively, Google can accept a smaller allocation at a reduced price after a one-month grace period. After the first year, either party can walk away with 90 days’ notice.
Background: xAI Merger and a Growing Infrastructure Play
The agreement follows SpaceX’s February merger with Elon Musk’s xAI, which valued the combined entity at $1.25 trillion. That deal transformed SpaceX into a significant player in AI infrastructure virtually overnight.
In May, Anthropic announced a separate arrangement to occupy all compute capacity at SpaceX’s Colossus 1 facility in Memphis, Tennessee. The Google contract marks the second blockbuster infrastructure lease since that merger closed.
SpaceX’s first-quarter capital expenditure reached $10.1 billion, more than double the year-earlier figure. AI-related spending accounted for $7.7 billion of that total. Despite the heavy outlay, the AI segment posted an operating loss of $2.5 billion against just $818 million in revenue for the quarter.
IPO Timing and Competitive Stakes
SpaceX is targeting a public offering valuation above $1.75 trillion. Google’s parent, Alphabet, invested in SpaceX back in 2015 when the company was worth $12 billion, making the current valuation a staggering return on that original bet. Alphabet separately said this week it plans to raise $85 billion in stock, including a $10 billion commitment from Berkshire Hathaway, citing surging customer demand for AI capacity.
Google revised its own capital expenditure guidance for the year to between $180 billion and $190 billion in April, up from a prior range of $175 billion to $185 billion.
The announcement also rattled neocloud competitors. Shares of infrastructure leasing firms CoreWeave and Nebius fell sharply on Friday amid a broader tech pullback before partially recovering on news of the SpaceX deal.
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