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SpaceX and Google Solidify Major Compute Deal Ahead of Historic IPO

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SpaceX has secured a significant compute agreement with Google amidst its forthcoming IPO. Details as follows:

  • Deal Terms: Google will pay SpaceX $920 million per month from October 2026 to June 2029 for approximately 110,000 NVIDIA GPUs, CPUs, and other components.
  • Comparison: This agreement mirrors a similar deal with Anthropic, which involves Anthropic paying $1.25 billion monthly for compute access at Colossus 1, a data center initially designed for xAI, now a part of SpaceX.
  • Capacity Details: Under the agreement, Google will access half the compute that Anthropic has at Colossus 1. SpaceX has not specified which data center Google will use.
  • Motivation: A statement by Google highlights the need for additional compute resources to meet unexpected demand for their AI products, particularly the Gemini Enterprise platform.
  • Alphabet's Investment Strategy: Google's parent company, Alphabet, is investing heavily, with over $180 billion in capital expenditures planned this year, expected to grow in 2027.
  • Flexible Terms: The agreement includes a cancellation clause, allowing either party to terminate with 90 days notice after December 31, 2026, with phased implementation reducing fees if GPUs are undelivered by September 2026.
  • Strategic Timing: The deal announcement comes just before SpaceX's stock is to be listed on the Nasdaq with an ambitious $1.75 trillion valuation target, positioning it as the largest IPO in history.
  • Future Collaborations: Google's stake in SpaceX, worth over $100 billion post-IPO, underscores their long-term collaboration, including potential plans for orbital data centers.