SpaceX signed a $920 million monthly compute-leasing deal with Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL), granting access to roughly 110,000 Nvidia (NASDAQ:NVDA) GPUs across its data centers through mid-2029, days before its landmark public offering.
Who Gets An Exit Clause
Under the agreement outlined in a regulatory filing on Friday, capacity ramps to full rate by September 2026 at a reduced fee, with an exit clause allowing Google to terminate immediately if SpaceX fails to deliver the committed GPU count by that deadline. After 2026, either party may exit with 90 days’ notice.
The terrestrial compute deal also comes amid reports that Google and SpaceX are in separate talks to develop orbital data centers, with Google reportedly planning prototype satellite launches by 2027 under its Project Suncatcher initiative.
SpaceX's IPO prospectus indicates that its AI division recorded an operating loss of $2.5 billion in the last quarter, while generating $818 million in revenue. During the same period, the company spent $10.1 billion in total capital expenditures, including $7.7 billion specifically allocated to AI infrastructure.
Neocloud Rivals Feel the Pressure
SpaceX also struck a separate compute capacity deal with Anthropic at its Colossus 1 facility in Memphis. By entering the infrastructure leasing market, SpaceX is now competing with neocloud providers such as CoreWeave (NASDAQ:CRWV) and Nebius (NASDAQ:NBIS). Their shares fell sharply on Friday during a broader tech selloff and later recovered in part after the announcement.
SpaceX is targeting a valuation north of $1.75 trillion at its imminent listing.
The Elon Musk-led aerospace and space transport company has reportedly barred Hong Kong and mainland China investors from its IPO, citing U.S. International Traffic in Arms Regulations. Full exercise of underwriters’ overallotment option could add approximately $11.25 billion to the offering.
Co-lead underwriter Morgan Stanley (NYSE:MS) projects SpaceX revenue could reach $3.4 trillion by 2040, with its AI division contributing up to $190 billion by 2030. NYU finance professor Aswath Damodaran, however, values SpaceX closer to $1.3 trillion, calling its AI market size projections a fantasy.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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