Google to Pay SpaceX $920 Million a Month for Compute Capacity at xAI Data Centers

SpaceX has signed a deal to provide Google with artificial intelligence compute capacity at $920 million per month, according to a regulatory filing published Friday — an agreement that underscores the lengths to which major technology companies are going to secure AI infrastructure ahead of anticipated demand.

The contract runs from October of this year through June 2029 at the $920 million monthly rate, with capacity ramping up through September at a reduced fee. Under the terms, Google will draw on approximately 110,000 Nvidia graphics processing units, along with central processors, memory, and other components housed in SpaceX's data centers.

SpaceX stated in the filing that if it fails to "deliver access to the committed amount of GPUs by September 30, 2026," Google may immediately terminate the agreement or accept the available GPU count at a reduced fee following a one-month grace period. After this year, either party may exit with 90 days' notice.

A Google Cloud spokesperson said in an email that the arrangement was made "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." Google introduced Gemini Enterprise — subscription services aimed at large businesses — in October.

The agreement is the second large infrastructure deal SpaceX has announced since its February merger with xAI, Elon Musk's artificial intelligence company, in a transaction that valued the combined entity at $1.25 trillion. Last month, Anthropic announced a deal to use all of SpaceX's compute capacity at its Colossus 1 data center in Memphis, Tennessee.

The Google deal arrives days before a planned SpaceX initial public offering expected to raise record sums. Alphabet, Google's parent company, backed SpaceX in 2015 when the rocket company was valued at $12 billion; SpaceX is now targeting a public valuation of over $1.75 trillion.

SpaceX's AI segment recorded an operating loss of $2.5 billion in the first quarter on $818 million in revenue, while capital expenditures for the period totaled $10.1 billion — more than double a year earlier — with $7.7 billion of that committed to AI infrastructure. The compute leasing arrangements reflect SpaceX's effort to monetize data centers originally built to support xAI's Grok model workflows.

In its IPO prospectus, SpaceX identified Google as a competitor in both connectivity — where SpaceX operates the Starlink satellite internet service — and in AI, alongside OpenAI, Anthropic, Meta, and Microsoft. "We believe our compute infrastructure and related strategy provides us with substantial flexibility in how we allocate and monetize capacity," SpaceX said in the filing.

Google, for its part, is significantly expanding AI spending. In April, the company revised its 2026 capital expenditure forecast to between $180 billion and $190 billion, up from a prior estimate of $175 billion to $185 billion. Alphabet also said this week it plans to sell $85 billion in stock — including through a $10 billion investment by Berkshire Hathaway — to address what it described as "unprecedented customer demand."

The SpaceX-Google arrangement places SpaceX in direct competition with so-called neocloud infrastructure providers such as CoreWeave and Nebius, companies that have built businesses around leasing GPU capacity to AI firms. With its IPO on the horizon and two major compute agreements now in place, SpaceX's ability to sustain and expand that revenue stream will be a central test of whether its AI infrastructure bet can offset mounting losses in the segment.

Disclaimer