SpaceX signs $920 million a month cloud compute deal with Google

SpaceX is primed to receive a whopping $920 million per month from Google, so the latter can make use of its AI cloud computing facilities, according to an SEC filing today. This gives Elon Musk’s rocket, AI, and satellites company another major cloud customer weeks before its planned IPO.

The agreement runs from October 2026 through June 2029 and covers roughly 110,000 Nvidia GPUs along with CPUs, memory, and related infrastructure, according to the SEC filing. Compute capacity is expected to increase gradually till September at a lower cost before reaching the full monthly rate.

SpaceX AI cloud business in demand

The Google deal follows a similar arrangement SpaceX struck with Anthropic in May, where the Claude chatbot maker got full access to the full computing power of SpaceX’s Colossus 1 facility in Memphis, Tennessee. This facility houses more than 220,000 Nvidia processors and provides 300 megawatts of capacity, according to Reuters.

Together, the two contracts represent more than $70 billion in total value, provided neither is terminated early before its scheduled end date. On an annual basis, both deals are also worth a total of $26 billion.

SpaceX has widely mentioned a target of $75 billion in its upcoming initial public offering, and the company’s revenue story and outlook can only be further strengthened by these moves to lock in long-term, high-value AI compute customers.

Termination factors and terms

The contract can be terminated early in specific cases, and these terms have been put in to serve as protections for Google. Google can terminate the agreement after a one-month grace period if SpaceX fails to deliver the agreed number of GPUs by September 30, 2026, or accept whatever capacity SpaceX has delivered at that date for a proportionally reduced fee, according to the filing.

After December 31, either side can exit the deal with 90 days’ notice. The filing also stated that all intellectual property rights in content and AI models, in addition to all data processed on the infrastructure will belong to Google.

GPUs upon GPUs

The competition for GPU capacity has continued to grow at an alarming rate, and this deal only proves how crazy the competition has become among companies building large AI systems. Google operates its own massive data center network and custom TPU chips, and in spite of this, still has to pay nearly $1 billion a month to rent Nvidia hardware from another big tech company.

For SpaceX, the AI cloud compute hardware industry represents a new revenue stream distinct from its rocket and Starlink satellite businesses. The Colossus facility in Memphis, originally built to serve Musk’s own xAI venture, is now generating billions in annual revenue from outside customers.

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