Google pays SpaceX $920m dollars per month for AI computing power
Just before a long-awaited stock market flotation, SpaceX has secured a huge contract with Google for the leasing of AI computing power. Under the terms of this agreement, Google pays $920 million (€800 million) per month for the use of SpaceX’s data centre resources, including around 110,000 Nvidia GPUs and essential memory and processing hardware. The agreement runs from October this year to June 2029, with a ramp-up period through September during which lower fees apply.
Thanks to the agreement, Google can absorb unexpected spikes in demand for Gemini Enterprise, its AI platform for businesses. However, the contract includes strict performance requirements; if SpaceX fails to deliver the agreed GPU capacity by 30 September 2026, Google can terminate the agreement immediately or settle for fewer resources at a reduced rate. From next year, either company can end the collaboration with 90 days’ notice.
This partnership follows SpaceX’s merger in February with Elon Musk’s xAI, creating a combined entity valued at $1.25 trillion (€1.1 trillion). It is the second major infrastructure lease that SpaceX has signed recently, after a similar agreement with Anthropic concerning the Colossus 1 facility in Tennessee.
For Alphabet, Google’s parent company, this represents a significant return on its initial investment in SpaceX in 2015, which has seen the company’s valuation rise from $12 billion (€10.4 billion) to an expected $1.75 trillion (€1.5 trillion) for the upcoming IPO.
Musk is using these deals to demonstrate the profitability of his massive infrastructure spending. In the first quarter, SpaceX spent $10.1 billion (€8.7 billion) on capital expenditure, of which $7.7 billion (€6.7 billion) was earmarked for AI.
Despite these investments, the AI division reported an operating loss of $2.5 billion (€2.2 billion) against $818 million (€710 million) in revenue. Although Musk positions the Grok chatbot as a competitor to market leaders, the product is struggling to gain market share and is currently embroiled in legal disputes over generating deepfake images without consent.
Strategically, SpaceX is now focusing on monetising data centres that were originally designed for Grok’s internal needs.
In the IPO documentation, SpaceX acknowledged that while Google is a partner in leasing computing power, it remains a fierce competitor in the AI sector and in the broadband market, where Starlink competes with Google Fiber.
This agreement echoes a previous collaboration five years ago, although the roles were reversed then. At that time, SpaceX was paying Google for network and cloud resources to support the rollout of Starlink. Today, the dynamic has shifted as Google ramps up its own AI spending – raising its annual capital expenditure forecast to as much as $190 billion (€165 billion) – and SpaceX enters the ‘neocloud’ market to compete with companies such as Nebius and CoreWeave.
Business AM
Subscribers 0
Fans 0
Followers 0
Followers