Google commits to $920 million monthly SpaceX compute deal ahead of historic IPO
Regulatory filings reveal the terms of the contract, which mirrors a similar arrangement with Anthropic and includes a termination clause, as SpaceX prepares to raise $75 billion in what is set to be the largest initial public offering in history.
Google has entered into a significant compute agreement with SpaceX, committing to pay $920 million per month for access to approximately 110,000 NVIDIA GPUs and related infrastructure. The contract spans from October 2026 to June 2029 and includes a termination clause allowing either party to exit with 90 days' notice after 31 December 2026. This announcement precedes SpaceX’s anticipated initial public offering on the Nasdaq exchange, which aims to raise $75 billion at a valuation of $1.75 trillion.
The deal, announced via a regulatory filing on Friday, mirrors a similar arrangement SpaceX made with Anthropic in late May. That agreement involves $1.25 billion per month for compute resources at a facility near Memphis, Tennessee, originally constructed for xAI, which is now part of SpaceX. Both contracts share comparable scopes and lengths, highlighting the intense demand for high-performance computing capacity among major technology firms.
SpaceX is preparing for a historic listing that could see it become the largest initial public offering in history. Paperwork filed with the Securities and Exchange Commission indicates the company is targeting a valuation of $1.75 trillion to raise approximately $75 billion. The stock is expected to begin trading on the Nasdaq exchange one week following the announcement of the Google deal.
Google, a longstanding investor in SpaceX, is positioned to hold a substantial stake in the company post-IPO. Estimates suggest the value of Google’s holding could exceed $100 billion once the listing is complete. The compute agreement underscores the deepening financial and operational ties between the two entities as they navigate the transition of SpaceX into the public markets.
Market participants are aware of potential passive buying triggered by the listing, with estimates ranging from $22 billion to $27 billion. The ERShares Private-Public Crossover ETF holds approximately 23 per cent of its portfolio in SpaceX, offering pre-IPO liquidity to investors. Analysts note that markets are likely to front-run this event, given the fixed timeline of the inclusion and the scale of the offering.
The specific financial terms of the Google-SpaceX compute deal were detailed in the filing, confirming the monthly payment structure and the inclusion of CPUs, memory, and other related components. While the exact final valuation and funds raised may fluctuate until the IPO is completed, the agreement provides a clear view of the capital commitments involved in securing next-generation artificial intelligence infrastructure.
The long-term viability of the cancellation clause’s impact on the deal’s total value remains a point of interest for investors. With the option to terminate available after late 2026, the actual utilisation of the 110,000 GPUs and the sustained demand for compute resources will be key factors in determining the economic outcome for both parties over the three-year period.
