Heading into its initial public offering (IPO) set for tomorrow, SpaceX gave an attention boost to the space sector, with several companies benefiting. But there is also another surprising winner from SpaceX’s plans to go public: Alphabet (GOOG 2.23%) (GOOGL 1.95%).
Not only does it own a stake in the company, but it also has a growing partnership with SpaceX. That means, even after the IPO, Alphabet can still benefit from the space company’s long-term success.
Image source: Getty Images.
The stake in SpaceX
In 2015, Alphabet joined Fidelity Investments in a $1 billion funding round for SpaceX, with Alphabet owning a 6.1% stake of the space company as of the end of 2025. But with SpaceX’s merger with Elon Musk’s other company, xAI, that may now only be worth about 5%.
The value of that stake will be a little murky for the time being, with only estimates of what Alphabet’s shares could be worth. But once Spacex goes public, there will be a clearer picture, as Google will report the stake in its quarterly filings. Rather than just keep the paper gains, however, Alphabet may eventually start selling its position, unlocking the cash to fund its own endeavors.
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The growing partnership
Ahead of the IPO, on June 5, SpaceX made a deal with Alphabet-owned Google to rent compute capacity from October 2026 to June 2029 for $920 million a month. The deal is in response to the surging demand Google is seeing for its enterprise artificial intelligence (AI) agent platform, Gemini Enterprise.
Although Alphabet doesn’t break down revenue specifics for Gemini Enterprise, it still shares a few impressive stats that highlight growing demand. For the company’s 2026 first-quarter earnings, the tech giant reported 40% growth in paid monthly active users from the previous quarter.
There are a few stipulations in the deal that would allow Alphabet or Tesla to cancel the contract, but it can be immediately beneficial for both companies: SpaceX receives recurring revenue, and Alphabet gains access to compute power without having to build its own infrastructure.
The companies may also work together in some capacity on Google’s Project Suncatcher initiative. Announced in 2025, Google’s project will work on turning space-based data centers into a reality, with Google previously planning to launch two prototype satellites by early 2027.
Going beyond the SpaceX connection
Between the stake in the company, the compute renting deal, and the potential for orbital data centers, everything is shaping up for both companies to be intertwined long after the SpaceX IPO. As SpaceX succeeds, Alphabet can benefit either as a customer or collaborator to achieve its own goals.
That said, there’s more for long-term investors to consider than just Alphabet’s stake and partnerships with SpaceX. One concern that pops up with big tech companies like Alphabet is the accelerating spending spree to win the artificial intelligence (AI) race. In February, Alphabet said it expects its capital expenditures to be between $175 billion and $185 billion, which would be more than double what it spent in 2025. Also, it recently announced plans for an $80 billion equity capital raise to help fund AI infrastructure development to meet “unprecedented customer demand.”
The good news is that all that spending appears to be showing up in the company’s quarterly results. For Q1 2026, the company’s cloud division, which is most closely connected to its AI products and services, reported a 63% increase in revenue to $20 billion.That helped boost total revenue by 22% to $109.9 billion. It’s still important to keep an eye on those costs, but Alphabet’s progress is showing why it can be a long-term winner in a portfolio.
