Here’s a sentence you probably didn’t expect to read: Google is paying SpaceX nearly a billion dollars a month to borrow computing power from xAI’s data centers.
According to a SpaceX SEC filing, Google signed a $30 billion deal with SpaceX — which now owns Elon Musk’s xAI — that will see SpaceX receive $920 million per month in exchange for access to xAI’s data center infrastructure, running from October this year through June 2029.
The deal gives Google access to 110,000 NVIDIA GPUs, plus CPUs and memory. SpaceX even built in a penalty clause: if it can’t deliver that GPU count by September, Google can either walk away entirely or accept a reduced number at a lower rate after a one-month grace period.
The obvious question is: why does Google need to rent anyone’s hardware? It operates one of the largest data center networks on the planet.
The answer, according to a Google Cloud spokesperson, is that this is a short-term bridge deal — meant to cover surging demand for Gemini Enterprise, Google’s AI subscription tier aimed at large businesses. Essentially, enterprise customers are coming in faster than Google can spin up new capacity, so it’s plugging the gap with xAI’s Colossus infrastructure while its own buildout catches up.
It’s a strange situation any way you look at it. Google and xAI are direct competitors in the AI space, yet here they are in a multi-billion dollar landlord-tenant arrangement.
And Google isn’t alone in this. Anthropic has a similar deal with SpaceX — paying $1.25 billion a month for access to the Colossus 1 data center through May 2029. So two of the biggest names in AI, both competing hard against xAI’s Grok, are effectively subsidizing Musk’s infrastructure buildout.
SpaceX is expected to go public on June 12, and if things go according to plan, it’s targeting what would be the biggest IPO in history. Locking in $920 million/month from Google and $1.25 billion/month from Anthropic right before that filing is… not a bad look for the prospectus.
The broader takeaway here is that AI compute demand has outpaced even the biggest companies’ ability to self-supply. When Google is paying a competitor’s parent company nearly a billion dollars a month just to keep the lights on for enterprise customers, it tells you a lot about where the pressure points are in this industry right now.