SpaceX’s Lucrative Deal with Google Bolsters Position as A.I. Infrastructure Powerhouse

Elon Musk’s SpaceX disclosed a significant agreement with Google, which will pay the rocket company $920 million monthly for computing power. This deal prepares SpaceX for its upcoming initial public offering (IPO).

The agreement, starting in October and spanning until June 2029, potentially yields SpaceX approximately $30 billion. It reinforces SpaceX, owner of Mr. Musk’s artificial intelligence lab xAI, as a key infrastructure provider in the competitive A.I. sector.

The collaboration will grant Google access to 110,000 A.I. chips from Nvidia. According to Google, these chips will fulfill unexpectedly high customer demand for its A.I. models. Google’s cloud business already boasts contracts worth $460 billion that have yet to be recognized as revenue, signaling soaring demand for its services.

“Google Cloud and SpaceX are longtime partners,” a Google Cloud spokesperson 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.”

SpaceX didn’t respond immediately to requests for comments.

SpaceX recently secured a similar arrangement with Anthropic, yet another prominent A.I. lab, providing it with computing power. Anthropic, also slated to go public this year, pays SpaceX $1.25 billion monthly.

With SpaceX’s IPO imminent, it could value the company at over $1.7 trillion. The potential valuation might elevate Musk to trillionaire status. In preparation for the IPO, detailed financial insights have been shared to attract investors.

Musk has invested in constructing a vast supercomputer in Memphis to support xAI. Despite these efforts, the company contrasts with rivals like OpenAI, Anthropic, and Google.

As SpaceX approaches its public offering, Musk has increasingly spotlighted A.I., pitching xAI’s computing capability as a revenue generator through collaborations with Anthropic and Google.

Moreover, Musk detailed plans for a substantial chip manufacturing plant in Texas. Earlier in April, SpaceX announced a $60 billion acquisition of A.I. startup Cursor, creator of a code-writing assistant.

The pact with Google further strengthens the bond between the search engine behemoth and the rocket developer. Google holds a roughly 5% equity in SpaceX and has evaluated using SpaceX as a launch partner in its Project Suncatcher initiative, aiming to deploy data centers into orbit.