The company needs extra computing power for Gemini Enterprise.
Google has just signed a $30 billion AI deal with SpaceX, which owns Elon Musk's xAI. According to a SpaceX filing with the Securities and Exchange Commission, it will receive $920 million a month from Google in exchange for computing power from xAI's data centers, starting in October this year until June 2029.
The agreement will give Google access to 110,000 NVIDIA GPUs, as well as CPUs and memory. SpaceX wrote that if it fails to deliver access to that number of GPUS by September this year, Google could either terminate their deal immediately or accept the number of GPUs provided at a reduced payment rate after a one-month grace period.
Since Google has its own global network of data centers and continues to build more, you may be wondering why it has to pay SpaceX for more computing power. Well, a Google Cloud spokesperson told * CNBC* and
that this is but "a short-term, timely agreement" to ensure that the company has "bridge capacity to meeting the surging demand" for Gemini Enterprise, its AI subscription for large businesses.
The New York TimesGoogle isn't its only competitor in the AI space that SpaceX is selling computing power to. The Musk-owned company also has a contract with Anthropic, giving the latter access to xAI's Colossus 1 data center. According to the documents SpaceX filed for its Initial Public Offering, Anthropic will pay it $1.25 billion a month through May 2029. SpaceX is expected to go public on June 12 and to raise enough money to make it the biggest IPO in history.