Google to pay SpaceX $920 million a month for xAI compute capacity
(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 President of the United States at the US Capitol Rotunda in Washington DC on January 20, 2025.
Saul Loeb | Afp | Getty Images
Days before the IPO, which is expected to bring in a record amount of cash, SpaceX signed a deal with SpaceX. Google This will bring in $920 million a month by providing the search giant with AI computing capacity.
According to one regulation filing On Friday Google will use about 110,000 Nvidia Graphics processing units, as well as central processors, memory and other components located in SpaceX’s data center. The deal covers $920 million from October this year through June 2029, with “capacity increasing at a discounted rate through September.”
If SpaceX “cannot provide access to the promised amount of GPUs by September 30, 2026,” SpaceX said in the filing, Google could terminate the deal immediately or accept the number of GPUs provided at a discounted rate after a one-month grace period.
After this year, either party may terminate the contract with 90 days’ notice.
This is the second major infrastructure deal SpaceX has announced following its February merger with Elon Musk’s artificial intelligence company xAI, in a transaction that valued the combined entity at $1.25 trillion. Last month, anthropic announced An agreement to use all of SpaceX’s computing capacity at the Colossus 1 data center in Memphis, Tennessee.
Alphabet made a windfall by backing SpaceX. Musk’s company was valued at $12 billion at the time of Google’s 2015 investment and aims to go public next week at a valuation of more than $1.75 trillion.
Musk is trying to highlight SpaceX’s AI story ahead of next week’s bid to show that the company is seeing at least some return on its massive investment in multiple data centers in and around Memphis. In its prospectus, SpaceX said capital expenditures in the first quarter more than doubled from a year earlier to $10.1 billion, with the vast majority of those costs ($7.7 billion) earmarked for artificial intelligence.
Meanwhile, the AI segment of the business recorded an operating loss of $2.5 billion on revenue of just $818 million in the quarter. Musk has touted xAI’s Grok model and chatbot as rivals to offerings from AI leaders OpenAI, Anthropic and Google, but his company’s products have yet to make much of an impact in the emerging market.
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