Google agrees to pay Elon Musk's SpaceX $920 million a month in $30 billion cloud computing deal

Alphabet Inc.'s Google has agreed to pay Elon Musk's SpaceX $920 million a month for computing power under a cloud services deal that runs through mid-2029, in a transaction that would be worth approximately $30 billion over its full term and marks one of the largest AI infrastructure agreements in corporate history.

SpaceX disclosed the agreement in a filing with the U.S. Securities and Exchange Commission on Friday. Under the terms, Google will pay the monthly fee from October this year through June 2029. The deal gives Google access to 110,000 of Nvidia Corp.'s graphics processing unit chips, as well as central processing units, memory chips and other related components.

Based on the capacity of Nvidia's H200 chips, the contracted computing power may represent well over 100 megawatts — enough electricity to power approximately 75,000 homes at any given moment.

The agreement includes a significant condition. If SpaceX fails to deliver access to the Nvidia chips by Sept. 30, Google has the right to terminate the contract with a one-month grace period. Either party also retains the right to exit the arrangement with 90 days' notice.

A Google Cloud spokesperson framed the deal as a short-term bridge measure. "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 spokesperson said.

The transaction is the second major cloud infrastructure deal SpaceX has struck in a matter of weeks. In May 2026, Anthropic agreed to pay SpaceX nearly $4.5 billion for computing capacity under a similar arrangement. The Musk-led space and technology conglomerate, operating its AI infrastructure through its xAI subsidiary, has been positioning itself as a compute infrastructure provider in anticipation of its initial public offering — a transformation of its business model that the company has made a central part of its IPO pitch.

xAI has built a large data centre in Memphis, Tennessee, and is now expanding operations in Mississippi. While the AI development arm has faced headwinds — Bloomberg reported in March 2026 that xAI had fallen behind on coding capabilities relative to rivals — the company's bet has shifted toward data centre infrastructure as its competitive edge.

The commercial relationship between Google and SpaceX is layered. Earlier this year, SpaceX disclosed that Google LLC owned a 6.11 percent stake in the company as of the end of 2025. Following SpaceX's February 2026 merger with xAI, Google now likely holds approximately 5 percent of the combined entity, according to Bloomberg calculations. The two companies have also been in separate discussions about using SpaceX to launch Google's experimental orbital data centres, a project Google has called Project Suncatcher.

At the same time, Google Cloud and xAI's Grok AI operate in the same market. The cloud deal represents a situation where Google is simultaneously a shareholder, a customer, and a commercial competitor of the Musk enterprise — a relationship that reflects the unusual dynamics of the current AI infrastructure race, where the demand for computing power has outpaced what any single company can build fast enough to supply on its own.

Google Cloud's contracted backlog, the measure of work sold but not yet recognized as revenue, nearly doubled from the prior quarter to more than $460 billion as of Alphabet's most recent earnings report. That figure illustrates the scale of demand the company is trying to meet with deals like the one struck with SpaceX.

Musk, who is also the world's wealthiest person with a net worth tracking above $300 billion, co-founded SpaceX in 2002. The company's IPO, which would make it one of the largest public listings in history, has been widely anticipated in financial markets. Revenue from compute infrastructure deals of this size strengthens the financial case for that offering and gives prospective investors a clearer picture of the cash flows the combined SpaceX-xAI entity can generate before a single rocket is launched.

SpaceX also separately holds a right to acquire coding startup Cursor for $60 billion, or pay a $10 billion breakup fee, under a previously disclosed arrangement. xAI and Cursor are already collaborating on computing resources and coding applications.