This is WILD!
One week before SpaceX's historic IPO, Google signed a deal to pay SpaceX $920 million per month from October 2026 through June 2029 for access to 110,000 Nvidia GPUs, CPUs, and related infrastructure (Save this).
That is $11 billion per year and up to $30 billion over the life of the contract.
This comes less than a month after Anthropic committed $1.25 billion per month for full access to the Colossus 1 data center in Memphis, 200,000+ GPUs, 300+ megawatts of power capacity, through 2029.
Two of the most consequential AI labs in the world combined committed value over $70 billion.
The question that haunted SpaceX's IPO roadshow was why did Elon keep spending billions constructing Colossus, Macro Hard and Macro Harder, three facilities totaling nearly 2 gigawatts of AI compute when xAI's revenue wasn't yet on the same trajectory as OpenAI or Anthropic?
Wall Street was pricing in a risk that Elon was building capacity ahead of revenue which would mean sustained cash burn without a clear payback timeline.
That concern was legitimate on its face, because xAI had been aggressive on model development but had not yet demonstrated the enterprise revenue numbers to justify the infrastructure cost.
The answer is that the compute itself was always the product.
Amazon has AWS, Microsoft has Azure, Google has Google Cloud, Elon just confirmed that he has been quietly building the fourth major hyperscale AI cloud and his first two paying customers are Google and Anthropic, the very companies most aggressively competing in the AI race.
xAI's Colossus facility in Memphis was built at a speed that no traditional data center developer could match, it went from groundbreaking to operational in roughly 122 days.
That is what happens when you have direct Nvidia relationships, a construction operation built around SpaceX-style execution, and a founder who treats infrastructure buildout the same way he treats rocket launches: compress every timeline and eliminate every bottleneck.
The result is that SpaceX now has three operational facilities, Colossus, Macro Hard, and Macro Harder with Macro Hard and Macro Harder in Blackwell architecture running 1.2 gigawatts combined.
Colossus 1, built on H100s and optimized for inference, is the facility that went to Anthropic first.
The Blackwell-era facilities are where the next-generation training workloads happen and Google's deal suggests they are renting into that capacity as it comes online through the second half of 2026.
Elon's compute leasing business would generate approximately $45 billion in incremental annual revenue on top of the mid-$20 billion range analysts had been modeling for SpaceX more than enough to fully subsidize the infrastructure investment and take the financial pressure off xAI delivering immediate AI product revenue.
That changes the entire valuation conversation of SpaceX completely!
Milk road remains bullish on Space and come join Milk Road Pro and get our full SpaceX IPO breakdown, how we're thinking about the $1.75 trillion valuation and our entire AI thesis. Link below!
Really fun to interview my old friend Bret Johnsen in Mission Control.
Three parts of the @SpaceX story that I wish were more widely discussed:
SpaceX has created thousands of good blue-collar jobs: welders, machinists, electricians. Everyone talks about the need to bring high-paying, blue-collar jobs back to America. SpaceX and Tesla are making that happen. To the best of my knowledge, they have created more manufacturing jobs in the US than just about any other American company over the last ten years. It’s hard to imagine our nascent industrial renaissance succeeding without these companies.
SpaceX was started with the goal of putting humans on Mars. And along the way, they have massively improved life for many humans on Earth. Mars may be a starter planet, but Earth is our planet, and the technologies developed at SpaceX are already in use today connecting and safeguarding the people of Earth. Starlink is a really efficient way to bring internet to low-income countries. In Kenya’s remote Murang’a County, Starlink has made it possible for patients in rural villages to consult with medical specialists via telemedicine. In the rainforests of Brazil, Starlink has connected schools to reliable high-speed internet that will provide more educational opportunities to students. Here in America, Starlink has proven vital to emergency teams responding to natural disasters. During Hurricane Helene, the Starlink hubs dropped into North Carolina and East Tennessee were often the only contact point between cut-off towns and the outside world. Literally life-saving.
This IPO will be a big milestone for the company. It’s important to celebrate this, while also remembering that making humanity multi-planetary is the ultimate goal. Going to Mars is really hard. There have been many setbacks thus far, ranging from fiery explosions to failed landings. There will be many more. Ad Astra Per Aspera. But SpaceX is at its best *after* a setback imo. Their first 3 launches were “failures”. Had the 4th not succeeded, there might not be a SpaceX today. The company’s success in the face of such daunting odds is a testament to the resilience of the culture and absolute commitment to the mission shared by every employee I’ve ever spoken with. Some of the world’s most talented engineers have chosen to live in Airstreams at Starbase away from their families for weeks on end in service of this goal. I will never forget the welders who told me they signed every weld because they wanted to be accountable if they were responsible for a failure. True missionaries, all of them.
I am grateful to every single person at SpaceX for helping to make the future as inspirational as possible. And I will be even more grateful if I get to see a blue sunset on Mars!
More info on https://t.co/dLOPlKr0Un
3 days ago, Elon Musk sat in front of JP Morgan’s 3,500 wealthiest investors and explained why the AI economy is moving to space:
1. Starship is the first rocket in history designed to be fully reusable. Every other mode of transport... planes, cars, ships... you take reusability for granted. Rockets have always been thrown away after one use. That ends with Starship. Once you achieve full reusability, the only cost is fuel. Starship runs on liquid oxygen and methane. Both are cheaper than jet fuel.
2. Sending cargo to orbit will soon cost less than international air freight. This is not a distant projection. It is the direct mathematical outcome of reusable rockets plus cheap propellant. The economics of space change entirely.
3. Starlink V3 is 10 to 20 times more capable than what's currently in orbit. The satellite is so large it can only launch on Starship. It cannot fit on any other rocket on Earth. 100 times more bandwidth. Half the latency. It may become the highest bandwidth, lowest latency communication system that exists.
4. AI and robots will consume bandwidth at a scale humans cannot picture. Peak human bandwidth is a few hundred bits per second. A computer runs at a trillion. The appetite of AI for data infrastructure will be unlike anything built for human use. Starlink V3 is being built for that world... not this one.
5. Data centers are moving to space. Not as an experiment. As the primary way to scale AI compute going forward. It is increasingly hard to build power plants on the ground. Nobody wants one near their home. Space removes that constraint entirely.
6. From the moon, you can scale to 1,000 terawatts of compute per year. From Earth... maybe 1. The moon has no atmosphere and one-sixth Earth's gravity. You can manufacture solar panels from moon materials and launch data centers with a railgun. No rockets needed. The math on this is not close.
7. Current human civilization uses less than one trillionth of the sun's energy output. You could scale to a million times Earth's entire economy and still be using less than one millionth of what the sun produces. The ceiling on what's possible is so far above us it barely registers as a ceiling.
8. There is not a single high-volume computer memory fab in America right now. Zero. The chips needed to build the AI future do not exist in sufficient quantity anywhere in the Western world. That is why SpaceX is building one. Not to compete. Because there is no other option.
9. SpaceX has been cash flow positive since around 2014. The IPO is not a distress move. Past funding rounds were not even fundraising... they were liquidity events for employees. The company bought back its own stock. The IPO is happening now because the next phase requires capital private markets cannot absorb.
10. The senior team has barely changed in over a decade. The CFO has been there 15 years. Musk joined as the seventh employee in 2002. He says people who believe in the mission don't leave. And above technical skill, he now looks for one thing... whether someone is genuinely a good person.
@jacksonhinkle On this day of June 4, 1989, the Chinese college students fought for freedom and lost their lives on Tiananmen Square. Now, there is no freedom at all that they can hold the 37th memorial anniversary in China. Even worse, rarely do new generations of Chinese know the disaster.
@ChineseEmbinUS On this day of June 4, 1989, the Chinese college students fought for freedom and lost their lives on Tiananmen Square. Now, there is no freedom at all that they can hold the 37th memorial anniversary in China. Even worse, rarely do new generations of Chinese know the disaster.
@ChnEmbassy_jp On this day of June 4, 1989, the Chinese college students fought for freedom and lost their lives on Tiananmen Square. Now, there is no freedom at all that they can hold the 37th memorial anniversary in China. Even worse, rarely do new generations of Chinese know the disaster.
@SpoxCHN_MaoNing On this day of June 4, 1989, the Chinese college students fought for freedom and lost their lives on Tiananmen Square. Now, there is no freedom at all that they can hold the 37th memorial anniversary in China. Even worse, rarely do new generations of Chinese know the disaster.
On this day of June 4, 1989, the Chinese college students fought for freedom and lost their lives on Tiananmen Square. Now, there is no freedom at all that they can hold the 37th memorial anniversary in China. Even worse, rarely do new generations of Chinese know the disaster.