SpaceX Enters $920M Monthly Deal with Google for AI Compute Capacity

SpaceX has announced an infrastructure agreement with Google, under which the tech giant will invest approximately $920 million monthly for AI compute power from SpaceX data centers. This deal will run from October 2026 until June 2029, with an initial ramp-up phase planned before full deployment.

Central to this arrangement is the deployment of about 110,000 Nvidia graphics processing units (GPUs), along with CPUs and memory resources. Regulatory filings reported by CNBC reveal that Google can terminate the contract if SpaceX fails to deliver the promised GPU capacity by September 30, 2026. After the first year, either party can exit the agreement with a 90-day notice, allowing for some flexibility in the partnership.

A Google Cloud spokesperson indicated that this collaboration aims to enhance infrastructure capacity in response to the growing demand for Gemini Enterprise, Google's AI platform designed for large organizations. This deal marks SpaceX's second major AI infrastructure agreement, following its merger with xAI earlier this year. In a related move, Anthropic recently announced plans to utilize the complete compute capacity of SpaceX’s Colossus 1 data center in Memphis, Tennessee.

This agreement coincides with SpaceX's preparations for an initial public offering, which is expected to value the company at over $1.75 trillion. In its prospectus, SpaceX reported first-quarter capital expenditures of $10.1 billion, with nearly $7.7 billion allocated for AI-related investments and infrastructure development. Despite these investments, SpaceX's AI segment generated $818 million in revenue during the quarter while incurring an operating loss of about $2.5 billion.

The compute infrastructure developed for xAI and Grok-related workloads is designed not only to support in-house projects but also to lease surplus capacity to third parties. This strategic approach aligns with broader trends in the AI sector, where demand for computational resources is surging.

As competition heats up, Google has significantly increased its AI spending, recently adjusting its projected capital expenditures for the year to a range of $180 billion to $190 billion. This includes plans to raise additional capital to meet growing customer demand, highlighting the increasing stakes in the AI infrastructure market.

The relationship between SpaceX and Google has evolved since their collaboration began in 2021 with a cloud services partnership. This initial agreement allowed SpaceX to utilize Google Cloud's infrastructure to enhance its Starlink satellite internet operations. The latest agreement signifies a deepening of that partnership, as both companies aim to leverage rapid advancements in AI technologies and their applications.

The deal between SpaceX and Google emphasizes SpaceX's ambitions in the AI infrastructure space and reflects broader trends in AI investment and competition among major players. With its IPO approaching, SpaceX is positioning itself to play a significant role in the future of AI, supported by substantial financial commitments from industry leaders like Google.