Google to pay SpaceX $920 million monthly for AI compute hardware

SpaceX Google compute deal signed ahead of historic Nasdaq IPO Why Google is paying SpaceX $920 million monthly for AI compute SpaceX IPO details include massive new Google AI compute agreement

SpaceX has announced a massive new compute deal with Google just ahead of its historic initial public offering (IPO). Disclosed in a regulatory filing on Friday, the agreement stipulates that Google will pay SpaceX $920 million per month from October 2026 to June 2029 for access to approximately 110,000 Nvidia GPUs, CPUs, memory, and related hardware.

This deal mirrors the scope and length of a previous agreement with Anthropic. That AI firm is currently paying SpaceX $1.25 billion per month through 2029 to rent all compute capacity at the Colossus 1 data center near Memphis, which was originally built by xAI and is now officially part of SpaceX.

Google’s deal appears to cover about half the compute capacity that Anthropic accesses at Colossus 1. While SpaceX has not specified which data center Google will utilize, CEO Elon Musk has previously indicated that Colossus 2 will be strictly reserved for xAI development.

Unlike Anthropic, which signed its deal to rapidly expand limited compute capacity, Google is already considered the world’s largest single owner of AI compute. A Google spokesperson described the new agreement as a short-term response to bridge capacity constraints for Gemini Enterprise, which has experienced unexpectedly high demand following the launch of new AI products.

Alphabet, Google’s parent company, is currently spending aggressively on infrastructure, committing over $180 billion in capital this year with plans to increase that figure in 2027, supported by an $80 billion equity sale.

Like the Anthropic deal, the Google agreement includes a cancellation clause allowing either party to terminate the contract with 90 days’ notice after Dec. 31, 2026. Furthermore, Google will gradually increase its hardware access through September at a reduced fee, retaining the option to terminate the deal immediately if SpaceX fails to meet GPU quotas by Sept. 30, 2026.

Announced just a week before SpaceX’s planned Nasdaq debut, the lucrative deal will help the aerospace company raise an estimated $75 billion at a record-breaking valuation of $1.75 trillion. Google, a longstanding investor in SpaceX, expects its existing stake to be worth over $100 billion post-IPO.

Looking ahead, the two tech giants are also reportedly discussing the development of orbital data centers, which represents a key component of SpaceX’s post-IPO roadmap.