SpaceX lands $920M monthly Google AI compute deal, IPO two times oversubscribed ahead of June 12 Nasdaq debut

Google compute deal

SpaceX said on Friday it has entered into a multi-year cloud services agreement with Alphabet's Google, locking in computing capacity as it prepares for its stock market debut next week. Google will pay SpaceX $920 million monthly from October this year to June 2029, with capacity ramping up through September at a reduced fee. The compute capacity provided includes about 110,000 Nvidia GPUs, CPUs, memory and other related components. The pact brings another high-profile customer to SpaceX, after Anthropic, strengthening its AI narrative as it targets a $75 billion raise in its upcoming initial public offering.

Google Cloud and SpaceX are longtime partners. 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.

Anthropic said in May it had reached a deal to use the full computing power of SpaceX's Colossus 1 facility in Memphis, Tennessee, which houses more than 220,000 Nvidia processors and will give the Claude chatbot maker 300 megawatts of new capacity within a month. On an annual basis, SpaceX's compute access deals with Anthropic and Google are worth roughly $26 billion combined. The disclosed agreements are worth more than $70 billion in aggregate, assuming neither contract is terminated before its scheduled end date.

IPO demand and roadshow

SpaceX has drawn investor demand of about $150 billion for its IPO, about double the $75 billion it is seeking to raise, two people familiar with the matter said on Friday. The company remains in the early stages of the marketing process, and investor demand is still subject to change before the IPO prices next week. Some large institutional investors tend to submit orders late in IPO processes, and current subscription figures reflect indications of interest rather than final allocations.

Lots of people will have to explain why they don't own it rather than justifying a decision to buy it.

The roadshow presentation emphasized the uniqueness of SpaceX's rocket-launching business, which it said has accounted for the lion's share of mass lofted into orbit in the past three years, and the strength of the company's Starlink internet business. SpaceX also touted a $23 trillion market opportunity it says awaits its artificial intelligence offerings, adding it is the only company that can escape the limitations of earthbound businesses and use space to build AI compute capacity.

China and Hong Kong restrictions

SpaceX's underwriters have barred investors in China and Hong Kong from participating in the company's planned initial public offering, Bloomberg News reported, citing people familiar with the matter. Lead banks managing the offering instructed members of the underwriting syndicate not to accept orders from customers in China and Hong Kong, including private banking clients, due to regulatory and compliance concerns. SpaceX's website and IPO marketing documents were not accessible on Friday in Hong Kong and mainland China, a Reuters review showed. An "Error 1009" message was displayed in response to attempts to access the company website and marketing material. Web security provider Cloudflare said the most common explanation for the error was that the website owner has banned the country or region of the related IP address from access.

S&P 500 entry hurdles

SpaceX's entry into the S&P 500 will take longer after S&P Dow Jones Indices declined to relax rules for megacap IPOs, delaying billions in passive fund inflows. To join the S&P 500, a company must trade publicly for at least 12 months, be profitable under U.S. accounting standards and hold a free float of at least 10%. SpaceX, expected to debut on June 12, meets none. The company posted a net loss of $4.94 billion in 2025, while revenue rose 33% to $18.67 billion. It has never been profitable. The current metrics imply a free-float of 3%-4%, according to Reuters calculations, far below the 10% requirement. J.P.Morgan estimated that SpaceX would have drawn about $10 billion of passive inflows on S&P inclusion, assuming a $2 trillion market cap and a 5% float.

Financial context

SpaceX aims to raise $75 billion in a deal that would value the company at $1.75 trillion, immediately vaulting it into the ranks of the 10 most valuable U.S.-listed firms. The listing could become the first U.S. market debut in excess of $1 trillion. SpaceX posted a net loss of $4.94 billion in 2025, while revenue rose 33% to $18.67 billion. The company has built a massive supercomputer in Memphis to power xAI, and in April announced a $60 billion deal to acquire the AI start-up Cursor, which makes a code-writing assistant.