Ahead of its US IPO scheduled for this week, Elon Musk’s SpaceX is making a strategic move into the artificial intelligence infrastructure market. The company has finalised a multi-year cloud deal with Alphabet, securing massive computing resources for the tech giant and dynamically changing the market narrative around its upcoming valuation.
The financial terms of the contract reflect the gigantic scale of the current demand for AI power. Google will pay SpaceX as much as $920 million per month from October this year until June 2029. In return, Alphabet will gain access to a dedicated infrastructure of around 110,000 Nvidia GPUs, along with the necessary memory and associated components. By September, the available capacity is expected to be gradually increased at a reduced rate, allowing Google to smoothly deploy the new resources into its operational structures.
For SpaceX, Alphabet is another partner after Anthropic, which in May decided to use the full capacity of the Colossus 1 facility in Memphis. Together, these two contracts generate around $26 billion in revenue on an annualised basis, with a total estimated value of more than $70 billion. Such a cash injection dramatically strengthens SpaceX’s position ahead of its upcoming initial public offering (IPO), in which the company aims to raise $75 billion. The company’s business profile is clearly evolving from a pure space entity to a foundational backbone for the global AI sector.
However, the alliance is based on strict operational conditions. If SpaceX fails to deliver the agreed number of GPUs by 30 September, Google – after a one-month grace period – will gain the right to break the contract immediately or reduce the fees proportionately. After 31 December, either party will be given the option to terminate the collaboration with 90 days’ notice. An important condition for Alphabet was also the full retention of intellectual property rights to its own content, artificial intelligence models and related data.
