(June 6): Alphabet Inc’s Google has agreed to pay Elon Musk’s SpaceX US$920 million ($1.19 billion) a month for computing power as part of a cloud services deal that runs through mid-2029, its second such agreement with an artificial intelligence (AI) competitor in a matter of weeks.
Google will pay SpaceX the monthly fee from October this year through June 2029, SpaceX said in a filing on Friday. That amounts to about US$30 billion through the time of the agreement.
If SpaceX fails to deliver access to Nvidia Corp chips as part of the deal by Sept 30, Google has the right to terminate the contract, with a one-month grace period, the filing showed.
A Google Cloud spokesperson said the deal would help the company meet demand for its AI services. In its most recent earnings report, Alphabet said Google Cloud’s backlog — the measure of contracted work that hasn’t been recorded as revenue yet — nearly doubled from the prior quarter to more than US$460 billion.
“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,” the Google spokesperson said in a statement.
SpaceX previously signed a similar agreement with Anthropic PBC. The Musk-led company, through its xAI subsidiary, has been looking to shore up revenue and transform its AI business into a compute infrastructure provider — the key business the company has been touting as part of its initial public offering.
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Although xAI has fallen behind on coding, it is betting that its edge is in data centre infrastructure, which the three-year-old business has built in Memphis, Tennessee, and is now expanding in Mississippi.
The contract gives Google access to 110,000 of Nvidia’s graphics processing unit chips, as well as central processing unit chips, memory chips and other related components. Based on the capacity of Nvidia’s H200 chips, that may represent well over 100 megawatts of computing power — or enough power to energize 75,000 homes at any given moment.
The relationship between Google and SpaceX is at once collaborative and competitive.
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Earlier this year, SpaceX disclosed that Google LLC owned a 6.11% stake in the company at the end of 2025. Following the February merger of SpaceX with xAI, Musk’s AI and social media company, Google now likely owns roughly 5% of SpaceX, according to Bloomberg calculations.
The cloud deal isn’t the only pact that Google and SpaceX have been engaged in talks over. The two companies had been discussing launching the search company’s test products for orbital data centres, a person familiar with the matter said in May. Google previously said it was exploring deals with other launch providers for what the company called Project Suncatcher.
Under the pact disclosed on Friday, either party also has the right to terminate the arrangement with 90 days’ notice — the same feature as in Anthropic’s deal.
SpaceX, through its AI arm, also has a deal with start-up Cursor, which gives it the right to acquire the firm for US$60 billion or pay US$10 billion as a break-up fee. Cursor and xAI are already collaborating on computing resources and coding, Bloomberg reported.
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