Google to Pay SpaceX $920 Million Monthly for AI Compute Power Ahead of Historic IPO

In a significant move underscoring the intense demand for artificial intelligence infrastructure, Google has announced a substantial agreement to pay SpaceX $920 million per month for access to its advanced compute resources. This deal, disclosed in a regulatory filing on Friday, is set to run from October 2026 through June 2029, providing Google with crucial capacity ahead of its own anticipated growth in AI services. The timing is particularly noteworthy as it precedes SpaceX's historic initial public offering (IPO), which is expected to be the largest in history. Under the terms of this multi-year agreement, Google will gain access to approximately 110,000 NVIDIA GPUs, along with associated CPUs, memory, and other critical components. This arrangement mirrors a similar deal SpaceX struck with Anthropic in late May, where Anthropic agreed to pay $1.25 billion per month through 2029 for all available compute from SpaceX's Colossus 1 data center. While Anthropic's deal secures the entirety of Colossus 1, which was originally built by xAI (now part of SpaceX) for its own AI efforts, Google's agreement appears to cover roughly half the compute capacity Anthropic has access to, though the specific data center for Google was not disclosed. Elon Musk has previously indicated that the Colossus 2 data center would be reserved for xAI. Google, despite being widely regarded as the world's largest single owner of AI compute, cited "unexpected demand" for its recently launched AI products as the primary driver for this deal. A Google representative stated, "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 surge in demand aligns with its parent company Alphabet's aggressive spending strategy, with commitments exceeding $180 billion in capital expenditures this year, a figure expected to "significantly increase" in 2027, partly financed by a recent $80 billion equity sale. Like the Anthropic agreement, the deal with Google includes a crucial cancellation clause, allowing either party to terminate the agreement with 90 days' notice after December 31, 2026. Google's access to the data center resources will ramp up gradually through September 2026 at a reduced fee. The filing also stipulates that if SpaceX fails to deliver the committed amount of GPUs by September 30, 2026, Google may immediately terminate the agreement or accept the provided GPUs with a corresponding reduction in monthly fees, highlighting the critical importance of timely delivery in the fast-paced AI compute market. The announcement comes just a week before SpaceX's stock is slated to begin trading on the Nasdaq exchange, with the company aiming to raise around $75 billion at an estimated valuation of $1.75 trillion, making it the largest IPO ever. Google has been a long-time investor in SpaceX, with its stake projected to exceed $100 billion post-IPO. Beyond this compute deal, the companies are also reportedly in discussions to develop orbital data centers, a visionary component of SpaceX's long-term strategy following its public listing, further solidifying their strategic partnership in the burgeoning space and AI sectors.