Quick overview

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Google has agreed to pay Elon Musk’s SpaceX $920 million per month for processing power as part of a cloud services agreement that runs through mid-2029.

This is Google’s second such agreement with an AI rival in just a few weeks. According to SpaceX’s filing on Friday, Google will pay the monthly fee from October of this year through June of 2029. By the time of the agreement, that comes to roughly $30 billion.

If SpaceX is unable to provide Nvidia Corp. with access. chips by September as part of the agreement. 30. According to the filing, Google has the right to end the agreement with a one-month grace period.

According to a Google Cloud representative, the agreement will enable the business to satisfy consumer demand for its AI services. Google Cloud’s backlog, a measure of contracted work that hasn’t yet been reported as revenue, almost doubled from the previous quarter to more than $460 billion, according to Alphabet’s most recent earnings report. The Google representative said in a statement, “This is a short-term, timely agreement to ensure we have bridge capacity to meet surging customer demand for our agent platform, Gemini Enterprise, which has been even higher than we expected.”

. Through its xAI subsidiary, the Musk-led company has been trying to boost sales and turn its AI division into a provider of compute infrastructure, which is the main business it has been promoting as part of its IPO. The three-year-old is betting that its advantage lies in data center infrastructure, even though it has lagged in coding.