SpaceX Inks Pre-IPO Agreement to Supply AI Computing Services to Google
SpaceX Secures $920 Million Monthly Deal with Google
SpaceX, the rocket company founded by Elon Musk, has signed a significant cloud computing agreement with Google. According to the company's initial public offering (IPO) filing, Google will pay SpaceX $920 million per month for access to a massive cluster of AI chips. This deal is expected to bolster SpaceX's finances ahead of its IPO on June 12.
The agreement covers a computing infrastructure of approximately 110,000 Nvidia GPUs, which are crucial for powering Google's Gemini AI models. Google will begin paying the full monthly rate in October 2026, with a reduced fee applying during a ramp-up period until then. The deal will run through June 2029, implying total payments of roughly $30 billion over the life of the contract.
This agreement bears some resemblance to one struck with AI giant Anthropic, in which SpaceX leased compute capacity at its Colossus data centers in Memphis, Tennessee for $1.25 billion a month. These facilities were originally built to power Musk's rival AI venture, xAI.
SpaceX's IPO filing revealed that xAI posted an operating loss of $6.4 billion on total revenue of $3.2 billion last year. The filing adds that after December 31, "the agreement may be terminated by either party upon 90 days' notice."
The deals with Google and Anthropic come just days ahead of SpaceX's IPO, which will be the biggest in history, valuing the company at $1.8 trillion. This valuation is largely based on faith that Musk can deliver on his ambitions to vastly expand his Starlink satellite business, put data centers into space using SpaceX rockets, as well as begin colonizing Mars.
| Company | Monthly Payment |
|---|---|
| $920 million | |
| Anthropic | $1.25 billion |
Note: The table above compares the monthly payment amounts for the agreements with Google and Anthropic.
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Investor Takeaway
Investors should consider the potential impact of this deal on SpaceX's financials ahead of its IPO.
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