$30 billion for Elon Musk: Google rents computing power from SpaceX
Due to the AI boom, computing power is in short supply worldwide. To avoid bottlenecks, Google rents massive amounts of server capacity. A deal with the space company SpaceX secures Elon Musk’s company $920 million a month.
Billion dollar deal for AI servers
SpaceX was actually a space company and was known, among other things, for its Starship. But CEO Elon Musk has now merged the group with his AI company xAI. As a result, SpaceX has become a major provider of computing power more or less overnight, as it now has facilities such as the Colossus 1 supercomputer. Google, which urgently needs capacity for its artificial intelligence, is now entering into a partnership with the company. Starting in October 2026, Alphabet will pay Elon Musk’s company $920 million (about €792 million) a month to use Colossus 1. By the end of the contract in June 2029, the total volume of the agreement will be around $30 billion (around €26 billion).
The contract includes access to 110,000 graphics processors from Nvidia. There are also regular processors, memory components and other network hardware. Google secures a special right of termination. If SpaceX does not provide the agreed hardware by September 30, 2026, the contract can be terminated with one month’s notice. A notice period of 90 days normally applies to both parties.
Google in distress
As Bloomberg reported, the agreement primarily serves as a bridge. Demand for Google’s AI platform Gemini Enterprise has risen sharply. With the rented capacities, the company wants to ensure that sufficient resources are available for customers. The booked output corresponds to over 100 megawatts. This is equivalent to the electricity needs of around 75,000 households. The fact that SpaceX can even rent out the enormous capacities is due to technical hurdles at its own subsidiary xAI. The AI model Grok could not be trained efficiently on the Colossus 1 architecture. A mix of different chips from Nvidia such as H100, H200 and GB200 proved problematic. As a result, xAI moved training to the newer Colossus 2 data center.
SpaceX becomes a cloud provider
In order to make the unused hardware in Colossus 1 profitable, SpaceX is now acting as a cloud service provider. The company recently signed a similar deal with Anthropic. This agreement even includes 220,000 GPUs for 1.25 billion dollars (about 1.08 billion euros) per month. The strategy is apparently intended to increase revenue and make the space company more attractive for the planned IPO. The connection between Musk and Google is not new. After SpaceX merged with xAI, Google is estimated to have a five percent stake in Musk’s company. In addition to the current cloud contract, there are also discussions about orbital data centers. In the project, SpaceX satellites could be used for data processing directly in space.
