Google's CEO and Elon Musk conversed prior to the inauguration ceremony of the 47th U.S. President, Donald Trump.

SpaceX and Google have entered into a cloud services agreement. Under this deal, Google has agreed to pay SpaceX $920 million per month from October 2026 through June 2029.

According to a regulatory filing on Friday, Google will utilize approximately 110,000 NVIDIA graphics processing units, along with central processing units, memory, and other components located within SpaceX's data centers. The agreement runs from this October until June 2029, with a monthly fee of $920 million. The computing capacity will be ramped up gradually before September, with the fees adjusted lower accordingly.

If SpaceX fails to deliver the agreed number of GPUs by September 30, 2026, Google may, after a one-month grace period, choose to terminate the agreement immediately or accept the delivered quantity and have the monthly fee reduced proportionally.

After December 31, 2026, either party may terminate the agreement with 90 days' notice.

A Google Cloud spokesperson stated that the deal is intended to "ensure we have transitional compute capacity to meet the surging demand from our customers for our Agent platform Gemini Enterprise, which has even exceeded our expectations." Google launched the Gemini Enterprise subscription service for large enterprises last October.

This agreement with Google marks the second major infrastructure transaction announced by SpaceX since its merger with Elon Musk's AI company, xAI, in February, at which time the combined entity was valued at $1.25 trillion. Last month, Anthropic announced a deal to utilize the full computing capacity of SpaceX's Colossus 1 data center in Memphis, Tennessee.

Alphabet has already reaped a massive windfall from its investment in SpaceX. When Google invested in 2015, Musk's company was valued at $12 billion. The company is now planning to go public next week with a valuation exceeding $1.75 trillion.

Musk is attempting to bolster SpaceX's AI narrative ahead of next week's IPO, aiming to show that the company's massive investments in multiple data centers in Memphis and surrounding areas are yielding at least some return. In its prospectus, SpaceX stated that total capital expenditures for the first quarter amounted to $10.1 billion, more than double the figure from the same period last year, with the vast majority—$7.7 billion—invested in AI.

Meanwhile, the AI division within the business reported an operating loss of $2.5 billion this quarter, with revenue of only $818 million. Musk has touted xAI's Grok model and chatbot as competitors to AI leaders OpenAI, Anthropic, and Google's products, but his company's offerings have yet to make a significant impact in the booming market.

SpaceX's AI faces multiple lawsuits and government investigations in the U.S. and abroad after Grok allowed users to easily create and share non-consensual pornographic images (i.e., deepfake pornography) by modifying adult or children's photos or videos.

In March, following a talent exodus from xAI, Musk stated that Grok needed to be rebuilt. Subsequently, the company secured an agreement granting it an option to acquire AI programming startup Cursor for $60 billion.

Concurrently, SpaceX is working to generate revenue from data centers initially built to handle Grok-related workloads.

In the section of its IPO filing regarding "computing services agreements with third parties," SpaceX stated: "We believe our compute infrastructure and related strategies provide us with significant flexibility in allocating and monetizing capacity."

In the prospectus, SpaceX lists Google as a competitor in its Connectivity business, where it operates the Starlink satellite internet service, while Google operates a fiber broadband business. In the AI field, SpaceX states it competes with Google as well as OpenAI, Anthropic, Meta, and Microsoft.

Google is significantly increasing its AI spending to catch up with rival hyperscale cloud providers. The company raised its capital expenditure forecast for this year in April to a range of $180 billion to $190 billion, up from a previous estimate of $175 billion to $185 billion.

Alphabet stated this week that it plans to sell $85 billion in stock, including $10 billion backed by Berkshire Hathaway, to meet "unprecedented customer demand."

In its move into the infrastructure leasing market, SpaceX also competes with a group of companies often referred to as "neoclouds," including CoreWeave and Nebius. These stocks were hit hard on Friday amid a broader tech sell-off but rebounded following the announcement of the SpaceX-Google partnership.

Google and SpaceX have previously entered into cloud cooperation agreements, but with reversed roles. Five years ago, Google agreed to provide computing and networking resources to SpaceX to help it deliver internet service via Starlink satellites. That agreement required SpaceX to install ground stations in Google data centers, marking a significant win for Google in its efforts to catch up to Amazon Web Services (AWS) and Microsoft Azure.

Thomas Kurian, CEO of the Google Cloud Group, stated at the time: "They chose us because of the quality of our network, as well as the distribution and coverage of the network."