Google to pay SpaceX $920 million a month for xAI data center compute capacity
Google has agreed to pay SpaceX about $920 million a month for compute capacity at data centers tied to xAI, CNBC reported. The roughly $11 billion annualized commitment highlights how scarce top-tier AI infrastructure has become.
CNBC Top NewsGoogle Cloud has agreed to pay SpaceX approximately $920 million a month for compute capacity at data centers linked to xAI, CNBC reported on Thursday. The deal annualizes to roughly $11 billion and represents a concrete step in Google's strategy to diversify its infrastructure suppliers as artificial-intelligence demand outpaces supply.
The arrangement covers GPU clusters and power capacity at SpaceX-linked facilities, according to people familiar with the matter. Wall Street analysts said the commitment underscores how scarce top-tier AI hardware has become, with hyperscalers leaning on outside partners rather than relying solely on their own data centers. The disclosure illustrates how cloud supply chains are being reshaped.
The news landed in the same week that Meta is reportedly exploring tens of billions in additional financing for AI infrastructure. Friday's nearly 4% Nasdaq drop, led by chip stocks, suggested investors are starting to question the sustainability of AI capital spending. Similar leasing deals from Microsoft, Amazon and Oracle could surface in coming weeks.
More from North America
Iran's threats against Red Sea chokepoint expose major vulnerability for oil market
Iran's signals that it could pressure both the Strait of Hormuz and the Bab el-Mandeb chokepoint expose a major vulnerability for global oil markets, CNBC analysis says. Analysts warn simultaneous disruption at both narrows could push prices sharply higher.
Apple's WWDC: Tim Cook's AI legacy on the line at his final developer conference as CEO
Apple heads into its annual WWDC with its AI strategy front and centre under heavy investor scrutiny. Plans to turn Siri into an agentic platform are a focal point. The stock's rich valuation is also being re-examined.
Nasdaq posts steepest drop in nearly 8 months as chip stocks lead selloff
The Nasdaq Composite logged its steepest one-day drop in roughly eight months as semiconductor stocks led the selloff. The S&P 500 is also on track to end a nine-week winning streak. Signs of fatigue in the AI rally are pushing investors toward a more cautious stance.