(LR) Google CEO Sundar Pichai speaks with Tesla and SpaceX CEO Elon Musk as they arrive at the inauguration ceremony before Donald Trump is sworn in as the 47th US President at the US Capitol Rotunda in Washington, DC, January 20, 2025.
Saul Loebe | Afp | Getty Images
Days before a planned IPO that is expected to bring in a record amount of money, SpaceX has struck a deal with it. Google that would bring in $920 million a month for providing AI computing capacity to the search giant.
According to an official filing on Friday, Google will use about 110,000 Nvidia graphics processing units, as well as central processors, memory and other components stored in the SpaceX data center. The agreement runs from October of this year to June 2029 at a cost of $920 million, and “can be increased in September at a reduced cost.”
SpaceX said in the filing that if it fails to “deliver the committed number of GPUs by September 30, 2026,” Google can immediately terminate the agreement, or accept the number of GPUs provided at a reduced price after a one-month grace period.
After this year, the agreement can be terminated by either party as long as they give 90 days notice.
It is the second major infrastructure deal announced by SpaceX following its merger in February with xAI, Elon Musk’s artificial intelligence company, in a transaction that valued the combined entity at $1.25 billion. Last month, Anthropic announced an agreement to use all of SpaceX’s computing power at its Colossus 1 data center in Memphis, Tennessee.
Alphabet made a windfall by backing SpaceX. Musk’s company was worth $12 billion when Google invested in it in 2015, and it aims to go public next week at a valuation of more than $1.75 billion.
Musk is trying to develop SpaceX’s AI story ahead of next week’s offering to show that the company is getting at least a return on its large investment in multiple data centers in and around Memphis. SpaceX said in its prospectus that spending in the first quarter reached $10.1 billion, more than double that of last year, most of that spending – $7.7 billion – committed to AI.
Meanwhile, the business’s AI division recorded a quarterly operating loss of $2.5 billion on revenue of just $818 million. Musk touted Grok’s xAI and chatbot model as a rival to offerings from AI leaders OpenAI, Anthropic and Google, but his company’s products haven’t made much of a dent in the booming market.
“We believe that our computing infrastructure and related technologies provide us with greater flexibility in how we allocate power and monetize,” SpaceX said in part of its IPO filing for “computer service agreements with third parties.”
In that speculation, SpaceX named Google as a competitor in the connection, where SpaceX owns the Starlink satellite internet unit and Google owns the fiber business. And in AI, Spacex said it competes with Google and OpenAI, Anthropic, Meta again Microsoft.
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