Google will pay SpaceX $920M per month for compute

In a significant move ahead of its much-anticipated IPO, SpaceX has finalized a substantial computing agreement with tech giant Google. The deal, which was revealed in a regulatory filing, stipulates that Google will pay SpaceX $920 million each month from October 2026 until June 2029. This arrangement grants Google access to approximately 110,000 NVIDIA GPUs, CPUs, memory, and other essential components. This collaboration mirrors a previous agreement SpaceX made with Anthropic earlier this year, where Anthropic committed to paying $1.25 billion monthly through 2029 for computing resources from SpaceX’s Colossus 1 data center in Tennessee. Notably, Google's arrangement secures about half the computational capacity compared to its counterpart. While details about the specific data center Google will utilize remain undisclosed, CEO Elon Musk has hinted that the Colossus 2 facility may be reserved for xAI, a company now under the SpaceX umbrella. Prior to its deal with SpaceX, Anthropic faced significant restrictions on its compute capacity, which were lifted following the agreement's announcement. In contrast, Google is positioned as the world's leading owner of AI compute resources, driven largely by a surge in demand for its newly launched AI solutions. A Google spokesperson emphasized that this partnership is a direct response to unforeseen demand for its Gemini Enterprise platform. "Google Cloud and SpaceX have a long-standing relationship, and this agreement provides essential capacity to meet increasing customer needs," the representative stated. Amidst this, Google's parent company Alphabet is on a capital investment spree, announcing over $180 billion in expenditures this year alone, with expectations for even more in 2027. To support this financial strategy, Alphabet recently revealed plans for an $80 billion equity sale. Similar to the deal with Anthropic, the agreement with Google includes a cancellation option, allowing both parties to terminate the contract with 90 days' notice after December 31, 2026. Additionally, the filing indicates that Google’s access to the computing resources will gradually increase at a lower rate until September. Should SpaceX fail to provide the agreed-upon number of GPUs by the end of September 2026, Google retains the right to either terminate the deal or adjust its payment based on the actual resources provided. This announcement comes just ahead of SpaceX's stock debut on the Nasdaq, where it aims to raise approximately $75 billion, potentially valuing the company at an unprecedented $1.75 trillion. As a long-standing investor in SpaceX, Google’s stake is projected to exceed $100 billion post-IPO, with discussions ongoing about future projects, including the construction of orbital data centers that align with SpaceX’s goals following its public offering.