Elon Musk’s space company, SpaceX, is set to provide computing power to Google under a deal worth nearly $1 billion per month.
Just days before its anticipated initial public offering (IPO), which is expected to raise record-breaking amounts, SpaceX signed an agreement with Google that will generate almost $1 billion per month in revenue by supplying computing capacity for artificial intelligence applications. The deal is expected to play a significant role in attracting investors ahead of the company’s public listing.
Under the agreement, Google will use approximately 110,000 Nvidia graphics processing units (GPUs), along with processors, memory and other components hosted in SpaceX data centres. The contract covers the period from October this year through June 2029, with a monthly fee of $920 million. Available computing capacity will increase gradually until September under a reduced pricing structure.
SpaceX stated that if it fails to provide the agreed number of GPUs by September 30, 2026, Google will have the option either to terminate the agreement immediately or accept a reduced number of units at a lower cost following a one-month grace period. After the first year, either company may end the partnership with 90 days’ notice.
A spokesperson for Google Cloud told CNBC that the agreement was designed to secure temporary additional computing capacity to meet surging demand for the Gemini Enterprise artificial intelligence platform, which has exceeded the company’s original expectations. Google launched Gemini Enterprise for large businesses last October.
The agreement marks the second major infrastructure deal announced by SpaceX since its merger with xAI, Elon Musk’s artificial intelligence company, in February. The transaction valued the combined entity at $1.25 trillion.
Last month, Anthropic announced that it would utilise the full computing capacity of SpaceX’s Colossus 1 data centre in Memphis, Tennessee.
Alphabet has already enjoyed substantial returns from its investment in SpaceX. When Google invested in the company in 2015, SpaceX was valued at approximately $12 billion. Today, the company is targeting a public offering at a valuation exceeding $1.75 trillion.
Musk is seeking to strengthen SpaceX’s profile in the artificial intelligence sector ahead of the IPO by highlighting the performance of its large-scale data centre investments around Memphis.
The two companies have worked together before, albeit with reversed roles. Five years ago, Google provided cloud computing and networking services to SpaceX to support the Starlink satellite internet network. The agreement included the installation of SpaceX ground stations within Google data centres and was viewed as a major win for Google in its efforts to compete with Amazon Web Services and Microsoft Azure.
At the time, Google Cloud Chief Executive Officer Thomas Kurian said SpaceX had selected Google because of the quality and global reach of its network.
Source: Naftemporiki.
Also read: Ukraine apologises over drone found off Lefkada: “We regret the incident”
