On Tuesday, May 19, 2026, at the Google Developer Conference in Mountain View, California, Alphabet CEO Sundar Pichai addressed attendees.

Over a decade ago, Alphabet (GOOGL) invested $900 million into SpaceX and has since increased its stake, now holding approximately 4.9% of the company, which is valued at $1.77 trillion.

This investment is poised to become one of Alphabet's most lucrative private market bets. The parent company of Google also holds a stake in the AI coding startup Cursor, which SpaceX has agreed to acquire. Should this acquisition be finalized, Alphabet's Cursor shares could translate into additional, SpaceX-linked value gains.

However, realizing the gains from the SpaceX stake is not straightforward. Alphabet will be subject to post-IPO lock-up periods that restrict share liquidity, and a direct sale could trigger significant tax liabilities. A tax expert informed CNBC that Alphabet could explore more tax-efficient strategies, such as exchangeable bonds or spin-offs, but none are as simple as a straightforward cash sale.

Alphabet's decision to maintain its SpaceX holding also carries strategic weight, particularly as Google actively seeks stable AI computing resources through various channels.

The company is significantly ramping up its AI infrastructure investments, making the SpaceX stake a timely asset. Analysis from Melius Research suggests that Alphabet's free cash flow could turn negative next year due to heavy infrastructure expansion costs. In this context, the SpaceX stake represents a highly valuable asset on the balance sheet, though converting it to cash quickly remains a challenge.