Is this a good sign for the future potential of xAI’s push to develop industry-leading AI offerings?
According to reporting from Bloomberg, SpaceX has secured a new deal with Google that will see the search giant pay SpaceX $920 million a month for additional computing power, as part of a cloud services deal that will run through mid-2029.
As per Bloomberg: “Google will pay SpaceX the monthly fee from October this year through June 2029, SpaceX said in the filing Friday. That amounts to about $30 billion through the time of the agreement.”
It’s the second major data processing deal that the recently combined xAI/SpaceX entity has secured in recent weeks. Anthropic signed a similar deal, per a filing last month, that will see Anthropic pay $15 billion per year for access to xAI’s Colossus data facilities.
That will boost SpaceX’s revenue projections ahead of its coming IPO, which, according to Barron’s, will be “the biggest capital-markets event ever,” and could ultimately see SpaceX reach a market valuation of $1.8 trillion.
That’s also a record high valuation. For context, SpaceX generated $18.67 billion in 2025, up from $14.02 billion in 2024. That would mean that, at a $1.8 trillion valuation, SpaceX could be set to be valued at 94 times its intake.
As such, SpaceX’s valuation is placing an absurd amount of trust in owner Elon Musk’s ability to make the impossible happen, with Musk projecting huge gains on orbital data centers and eventual space travel.
None of these things have proven possible, nor viable. Yet Musk’s reputation, and professional connections, enable him to command a premium on the share price, which is why SpaceX is set to receive such a high valuation.
Though from an xAI perspective, the fact that the company is renting out its data capacity to other artificial intelligence projects doesn’t seem to bode well for its individual projections, nor the capacity for xAI to compete with other AI developers and projects.
In some ways, Musk has already admitted defeat on the AI development front, at least to some degree, with xAI investing big into AI datacenters and capacity, only to see low to middling returns.
According to the SpaceX S-1 filing, which was filed last month, xAI reported a loss from operations of $6.4 billion in 2025, versus $3.2 billion in revenue.
Much of that has gone into xAI’s rapidly assembled Colossus datacenters, which were formed to enable xAI to compete. Musk has a personal grievance with OpenAI, which prompted him to approve funding to expand xAI’s data capacity, in an apparent effort to blow OpenAI out of the water and win in the AI race.
But in recent months, xAI has seemingly been derailed, or at least delayed in that effort.
In March, Musk admitted that xAI “was not built right first time around,” amid reports of several top engineers leaving the project. This prompted an entire rebuild of the project under new leadership.
Since then, the company has reached out to various AI researchers in an effort to get the project back on track. But the fact that xAI is now renting out data capacity to other projects seems like an admission that it’s not at the level that it had initially anticipated.
Still, Musk has reiterated his commitment to AI development, posting on X on May 26 that his AI project “will be great” and that he will never give up on his goal of building the best AI system.
It just seems that, right now at least, Musk needs money more than he needs a victory in the AI arena. That could mean that xAI’s development sees some level of stagnation ahead of the SpaceX IPO.
