Alphabet Inc.'s Google has agreed to pay SpaceX US$920 million per month for computing power as part of a cloud-services deal that runs through mid-2029, according to a company filing. The agreement, disclosed in a SpaceX filing on Friday, marks a significant partnership between the search giant and Elon Musk's space company.
Deal Details and Payment Structure
Google will pay SpaceX the monthly fee from October through June 2029, with capacity ramping up through September at a reduced cost. The deal includes access to Nvidia Inc. chips, which are critical for high-performance computing tasks. If SpaceX fails to deliver the chip access by September 30, Google has the right to terminate the contract, with a one-month grace period, the filing shows.
Under the pact, either party also has the right to terminate the arrangement with 90 days' notice.
Broader Collaboration Talks
The cloud deal is not the only pact that Google and SpaceX have been discussing. The two companies had been in talks about launching the search company's test products for orbital data centres, a person familiar with the matter said in May. Google previously said it was exploring deals with other launch providers for what the company called Project Suncatcher, an initiative aimed at developing space-based data centres.
This partnership underscores the growing demand for cloud computing resources and the strategic importance of space-based infrastructure for tech giants. SpaceX's Starlink satellite network and launch capabilities provide unique advantages for deploying and managing orbital computing systems.
The agreement is expected to bolster Google's cloud services, offering enhanced computing power for artificial intelligence, machine learning, and other data-intensive applications. For SpaceX, the deal provides a steady revenue stream and validates its ability to support large-scale commercial operations beyond satellite internet.
As the deal progresses, both companies will likely face scrutiny over the environmental impact of launching additional hardware into space and the sustainability of such large-scale orbital infrastructure. However, the potential benefits for computing capabilities and global connectivity are significant.
