Why Google is secretly winning from its $920M-a-month AI deal with SpaceX
Google is secretly winning from its $920 million-a-month AI deal with SpaceX.
If you've been reading the news headlines this week, you've likely seen that SpaceX raised $75 billion at $135 per share, putting the company's value at nearly $1.8 trillion.
But despite the market potentially making Elon Musk the world's first trillionaire, some investors are worried that there's a 'major disconnect' between market expectations and 'underlying fundamentals.'
Meanwhile, other tech giants such as Google are quietly reaping the benefits. According to SpaceX's IPO filing, Google has agreed to pay it $920 million per month for computing power.
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The agreement runs from October through to June 2029, meaning the total value of the deal could reach approximately $30 billion over its lifetime. In exchange, Google gains access to around 110,000 Nvidia AI chips, which the company says it urgently needs to meet demand for its increasing AI services.
It also helps establish SpaceX's xAI company as a dominant provider within the AI race.
Google also already owns a roughly 5 percent stake in SpaceX, meaning it benefits financially from the very IPO that is making SpaceX a more attractive business partner.
And separately, Google has been exploring the use of SpaceX as a launch partner for Project Suncatcher, its ambitious plan to place data centres in space. So a close relationship with SpaceX would bring its goal closer to reality.
“Google Cloud and SpaceX are longtime partners,” a Google Cloud spokesman said in a statement. “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.”
SpaceX reached a similar deal last month with Anthropic, which sees the AI giant pay $1.25 billion per month for computing power.
Meanwhile, Musk has built a large supercomputer in Memphis to power xAI and has announced plans for a major chip manufacturing facility in Texas. In April, SpaceX also agreed a $60 billion deal to acquire Cursor, an AI code-writing assistant.
Musk has built a massive supercomputer in Memphis to power xAI. But the company has largely lagged behind competitors such as OpenAI, Anthropic, and Google.
“Our mission is to build the systems and technologies necessary to make life multiplanetary, to understand the true nature of the universe, and to extend the light of consciousness to the stars,” SpaceX noted in its investor prospectus (via the Guardian).