Google to pay SpaceX $920 million a month for compute capacity at xAI data centers

In a landmark agreement just days ahead of its highly anticipated IPO, SpaceX has finalized a deal with Google that promises to generate a staggering $920 million per month. This arrangement will see SpaceX providing the tech giant with AI computational resources from its cutting-edge data centers. According to a recent filing, Google plans to utilize approximately 110,000 Nvidia graphics processing units, along with various central processors, memory, and additional components located within SpaceX's facilities. The contract will commence this October and extend until June 2029 at the established monthly rate, with an initial phase allowing for capacity adjustments at a lower fee through September. The filing also highlights specific performance metrics: should SpaceX fail to deliver the contracted GPU capacity by September 30, 2026, Google retains the right to terminate the agreement or accept a reduced supply at a discounted rate after a one-month grace period. After the first year, either party can cancel the contract with a 90-day notice. This significant partnership marks the second major infrastructure arrangement by SpaceX following its merger with xAI, Elon Musk's AI enterprise, earlier this year, a move that valued the combined company at an impressive $1.25 trillion. In a related development, Anthropic recently announced it would leverage all of SpaceX's computational resources at its Colossus 1 data center located in Memphis, Tennessee. Google has seen substantial returns from its investment in SpaceX, which was valued at $12 billion during the tech giant's initial investment in 2015. With the upcoming IPO, SpaceX is targeting a valuation exceeding $1.75 trillion.