Google has entered into a significant cloud-services agreement with Elon Musk's SpaceX, committing to pay $920 million per month for computing power. According to a Securities Exchange Commission (SEC) filing by SpaceX, the deal extends through mid-2029. Under the terms, Google will make monthly payments from October 2026 through June 2029, with capacity gradually increasing until September 2026 at a reduced cost.
Contract Details and Termination Clauses
The agreement includes a provision allowing Google to terminate the contract if SpaceX fails to deliver guaranteed access to Nvidia chips by September 30, 2026, with a one-month grace period. After December 31, 2026, either party can terminate the agreement with 90 days' notice. The compute capacity provided encompasses approximately 110,000 NVIDIA GPUs, CPUs, memory, and other related components. Google retains ownership and intellectual property rights over its content, AI models, and related data.
Context and Similar Deals
This deal comes just days before SpaceX's stock is expected to begin trading on the Nasdaq exchange. The arrangement is comparable in length and scope to a previous agreement SpaceX made with Anthropic in late May, where Anthropic agreed to pay $1.25 billion per month through 2029 for compute capacity from SpaceX's Colossus 1 data center near Memphis, Tennessee. Combined, Anthropic and Google will pay SpaceX $2.17 billion monthly for compute capacity. SpaceX has not specified which data center Google will utilize.
Google's Statement and Strategic Importance
A Google representative described the deal as a response to unexpected demand for its recently launched AI products. Google Cloud and SpaceX are long-time partners, and this short-term agreement ensures bridge capacity to meet surging customer demand for the Gemini Enterprise agent platform. Google is also a longtime investor in SpaceX, with its stake expected to be worth over $100 billion after the IPO. The companies are reportedly discussing the construction of orbital data centers, a key component of SpaceX's future plans. Google CEO Sundar Pichai has expressed interest in space-based data centers.
The TOI Tech Desk, a dedicated team of journalists, delivers the latest technology news, including gadget launches, reviews, trends, and in-depth analysis.
