Google to Rent xAI Compute for $920M a Month

Google will pay Elon Musk's SpaceX $920 million per month to lease artificial intelligence compute capacity, according to a June 5 regulatory filing. The deal spans 32 months, running from October 2026 through June 2029.

Under the deal, Google leases roughly 110,000 Nvidia GPUs alongside CPUs, memory, and networking hardware, for a total approaching $30 billion. The direction is the striking part: Google, widely considered the world's largest single owner of AI compute, is renting a data center built by xAI, the Grok developer that SpaceX folded in through a February merger.

A $920 Million Deal a Week Before SpaceX's IPO

The deal carries several contingency clauses. Google's compute capacity ramps up at a discounted rate through September 2026, with the full $920 million monthly fee starting in October. If SpaceX misses the September 30 GPU deadline, Google may—after a one-month grace period—end the deal immediately or pay only for the hardware delivered.

Termination rights are mutual. After December 31, 2026, either party can exit the deal with 90 days' notice. In length and terms, the deal closely mirrors the earlier SpaceX agreement with Anthropic.

The timing is pointed. The SpaceX IPO is set for the Nasdaq next week, aiming to raise $75 billion at a valuation near $1.75 trillion—which, if it lands, would be the largest IPO in history. Analysts read the SpaceX IPO timing as Musk burnishing the AI story ahead of the IPO.

SpaceX Monetizes the Colossus Data Center

The Colossus data center sits at the heart of that strategy. SpaceX completed its merger with xAI in February 2026, valuing the combined company at $1.25 trillion. That merger handed SpaceX a ready-built supercomputer. First built around Memphis to train Grok for xAI, the Colossus data center now earns its keep by renting compute to outsiders.

This deal is the second major infrastructure lease since the merger. Last month Anthropic agreed to rent all of Colossus 1's capacity for $1.25 billion a month, then doubled Claude's usage limits to show the payoff at once. Google's slice of the Colossus data center is estimated at about half that volume, and the merger keeps Colossus 2 reserved for xAI, Musk has said.

The data center business still loses money. According to CNBC, SpaceX's first-quarter capital spending hit $10.1 billion, $7.7 billion of it on AI. Its AI unit posted a $2.5 billion operating loss on $818 million in revenue, making SpaceX a newcomer against 'neocloud' rivals like CoreWeave and Nebius.

Why the World's Largest Compute Owner Is Renting GPUs

So why does Google rent another company's GPUs at all? Google calls the deal a short-term move. A Google Cloud spokesperson said demand for Gemini Enterprise—the corporate agent platform launched last October—ran far past forecasts, leaving a gap that needed 'bridge capacity.' Gemini Enterprise is Google's large-business subscription, and the Gemini Enterprise backlog is exactly what this deal is meant to absorb.

Google is hardly short on compute; by some estimates it is the single largest owner of AI compute on earth. That even Google must lease outside capacity shows how fast Gemini Enterprise demand has climbed. Keeping Gemini Enterprise responsive, in other words, is why Google reached beyond its own data centers. Alphabet has set this year's capital spending at $180 billion to $190 billion and plans an $85 billion stock issue to meet 'unprecedented' demand, including a $10 billion stake from Berkshire Hathaway.

Five years ago the two ran the same deal in reverse, when Google supplied compute and networking for SpaceX's Starlink. The merger has since flipped their roles, and that same merger is why SpaceX can sell compute at all. As Musk's Grok struggles for market share, the data center xAI built to power it has become a revenue line—monetized just as the SpaceX IPO needs an AI story.