Google and SpaceX Forge $920 Million Monthly Compute Partnership
In a landmark agreement, Google has committed to paying SpaceX $920 million per month from October 2026 through June 2029. This partnership grants Google access to approximately 110,000 NVIDIA GPUs, CPUs, memory, and other related components, significantly bolstering its computational capabilities.
This deal mirrors a similar arrangement SpaceX established with Anthropic in late May. Anthropic agreed to pay $1.25 billion per month through 2029 to utilize the full capacity of SpaceX’s Colossus 1 data center near Memphis, Tennessee. Originally constructed by xAI—now integrated into SpaceX—for its artificial intelligence initiatives, Colossus 1 has become a pivotal asset in these high-profile agreements.
While the specific data center Google will utilize remains undisclosed, it’s noteworthy that SpaceX CEO Elon Musk has indicated plans to reserve the Colossus 2 data center for xAI’s exclusive use. This strategic allocation underscores the growing demand for advanced computational resources in the AI sector.
Google’s decision to enter this agreement stems from an unexpected surge in demand for its recently launched AI products. A company representative stated, Google Cloud and SpaceX are long-time partners. This is a short-term, timely agreement to ensure we have bridge capacity to meet surging customer demand for our agent platform, Gemini Enterprise, which has been even higher than we expected.
This partnership comes at a time when Alphabet, Google’s parent company, is significantly increasing its capital expenditures. The company has committed over $180 billion this year, with expectations to significantly increase spending in 2027. To support these investments, Alphabet recently announced an $80 billion equity sale.
The agreement includes a cancellation clause, allowing either party to terminate the contract with 90 days’ notice after December 31, 2026. Additionally, Google’s access to the data center will ramp up through September at a reduced fee. If SpaceX fails to deliver the committed number of GPUs by September 30, 2026, Google has the option to terminate the agreement or accept the available GPUs with a corresponding reduction in monthly fees.
This announcement precedes SpaceX’s anticipated IPO, where the company aims to raise approximately $75 billion at a valuation of around $1.75 trillion, potentially making it the largest in history. Google’s longstanding investment in SpaceX is expected to yield significant returns, with its stake projected to be worth over $100 billion post-IPO.
Furthermore, reports suggest that Google and SpaceX are in discussions to develop orbital data centers, a key component of SpaceX’s post-IPO strategy. This collaboration could revolutionize data processing and storage, leveraging the unique advantages of space-based infrastructure.
