Google signs $920 million-a-month AI infrastructure deal with SpaceX

MUMBAI: The AI race is no longer just in the cloud, it’s heading into orbit-sized territory. Google has signed a massive multi-year agreement with SpaceX to secure artificial intelligence computing capacity worth $920 million per month, underscoring the intensifying battle among technology giants to lock in the hardware powering the next generation of AI systems. According to a regulatory filing made ahead of SpaceX’s planned initial public offering, the deal will give Google access to around 110,000 Nvidia graphics processing units (GPUs), alongside processors, memory and related infrastructure hosted across SpaceX data centres.

The agreement is scheduled to run from October 2026 until June 2029, although computing capacity will begin ramping up before then under a lower-fee structure.

The filing reveals just how critical AI infrastructure has become. SpaceX is required to deliver access to the full 110,000 GPUs by 30 September 2026. Should it fail to meet that target, Google can either terminate the contract immediately or continue under a reduced payment arrangement after a one-month grace period.

From next year, both companies will also have the option to exit the agreement with 90 days’ notice.

The deal is designed to help Google meet surging demand for Gemini Enterprise, its AI platform aimed at large businesses. A Google Cloud spokesperson told CNBC that customer demand had exceeded expectations, making additional computing capacity a strategic necessity rather than a luxury.

The agreement also shines a spotlight on SpaceX’s growing ambitions beyond rockets and satellites. It comes just months after the company’s merger with Elon Musk’s artificial intelligence venture xAI, a transaction that valued the combined entity at a staggering $1.25 trillion.

SpaceX is increasingly positioning itself as a major AI infrastructure provider. The company recently struck a separate deal with Anthropic, granting the AI startup access to the entire compute capacity of its Colossus 1 data centre in Memphis, Tennessee.

The numbers behind the strategy are eye-catching. SpaceX disclosed that first-quarter capital expenditure reached $10.1 billion, with $7.7 billion tied directly to AI-related investments. Yet despite the spending spree, its AI business reported an operating loss of $2.5 billion on revenue of $818 million during the quarter.

The latest agreement highlights how access to computing power is rapidly becoming one of the most valuable commodities in technology. As AI models grow larger and more demanding, companies are racing to secure scarce GPU resources before competitors do.

The partnership also deepens an already complex relationship between Google and SpaceX. The two companies previously collaborated on cloud and networking services supporting Starlink’s satellite internet operations. Yet in its prospectus, SpaceX identified Google as a competitor in both connectivity and artificial intelligence.

In the new AI economy, rivals can also be customers.

And with 110,000 Nvidia chips, nearly $1 billion changing hands every month, and a contract stretching into 2029, the latest deal offers a glimpse of the extraordinary scale at which the AI infrastructure race is now being fought.