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Google to pay SpaceX $920M a month for compute capacity at xAI data centers

Google to pay SpaceX $920 million a month for compute capacity at xAI data centers

cnbc.com

June 5, 2026

4 min read

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62/100

Summary

Google will pay SpaceX $920 million a month for AI compute capacity at SpaceX's data centers, utilizing approximately 110,000 Nvidia graphics processing units along with other hardware components. The agreement is effective from October 2023 through June 2029.

Key Takeaways

Google will pay SpaceX $920 million per month for AI compute capacity, utilizing approximately 110,000 Nvidia GPUs and other components from SpaceX's data centers.
The agreement between Google and SpaceX is set to last from October 2023 to June 2029, with provisions for termination by either party with 90 days' notice after this year.
SpaceX's capital expenditures for AI reached $7.7 billion in the first quarter, contributing to an operating loss of $2.5 billion in the AI segment.
SpaceX's merger with xAI, Elon Musk's AI company, valued the combined entity at $1.25 trillion ahead of its planned IPO.

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Community Sentiment

Mixed

Positives

Google's investment in SpaceX for GPU capacity highlights the growing demand for advanced AI computing resources, which could drive innovation in AI applications.
The collaboration between Google and SpaceX may lead to improved infrastructure for AI models, potentially enhancing performance and accessibility for developers.

Concerns

The high cost of Grok compared to competitors raises concerns about its value proposition, especially given its performance limitations.
Users report significant latency issues with Google's AI services, particularly with Gemini, indicating potential challenges in model efficiency and user experience.
The perception that Grok is not a Tier 1 model suggests skepticism about its capabilities, which could hinder its adoption in competitive AI markets.