Google to Pay SpaceX $920M Monthly in Cloud-Computing Deal
Google has agreed to pay SpaceX $920 million monthly from October 2026 to June 2029 for data center capacity, including at least 110,000 Nvidia chips, according to a SpaceX securities filing. The deal strengthens both companies' AI businesses.
Key Numbers
Alphabet Inc. (GOOGL, GOOG) has signed a deal with SpaceX to rent data center capacity for $920 million per month, as disclosed in a SpaceX regulatory filing on Friday. The agreement aims to expand both companies' artificial intelligence operations and comes ahead of SpaceX's anticipated initial public offering.
Deal Details
- Value: $920 million per month from October 2026 to June 2029.
- Computing Capacity: At least 110,000 Nvidia chips.
- Timeline: Capacity will ramp up over the summer.
- Cancellation Right: Google can cancel in October if SpaceX fails to deliver the promised chips.
Context
The deal reflects the intense demand for computing power to develop AI models. SpaceX, which operates the Starlink satellite network, is diversifying its revenue streams before its IPO.
What This Means for Investors
The agreement secures Google access to massive computing infrastructure for AI, while providing SpaceX with a significant cash flow ahead of its public listing. Risks include Google's reliance on a single chip supplier (Nvidia) and potential delivery delays.
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