Alphabet’s (GOOG) Google and SpaceX (SPAX.PVT) are in advanced discussions over to launch data centers in space, the Wall Street Journal reported on Tuesday.
The talks come as SpaceX prepares for what is expected to be the largest initial public offering in history this summer. Orbital data centers have become a big piece of SpaceX’s pitch to prospective investors, with CEO Elon Musk positioning them as the company’s next major commercial product.
A partnership with Google, which already owns 6.1% of SpaceX per the latest filings, would boost that pitch ahead of the company going public.
Google’s interest in orbital computing is not new. Last year the search giant announced Project Suncatcher, the Journal noted, a moonshot initiative aimed at launching prototype satellites by 2027. The company is working with Planet Labs to build those satellites.
But a partnership with SpaceX would enhance those aspirations, with SpaceX being the preeminent private rocket launch company and space payload provider.
SpaceX recently filed for authorization to launch up to one million satellites to support its orbital data-center ambitions. The company also signed a deal with Anthropic where the AI firm will use all of the computing capacity at SpaceX’s Colossus 1 data center. That amounts to more than 300 megawatts of new AI compute via more than 220,000 Nvidia GPUs.
In February SpaceX merged Musk’s AI company xAI in a transaction that valued the combined entity at $1.25 trillion, and separately secured an option to acquire the AI coding startup Cursor for $60 billion later this year. Last week Musk announce that xAI would be “dissolved” as a separate company, and merged with other AI products like Grok under a division dubbe “SpaceXAI.”
SpaceX also operates Starlink, its satellite based internet service, which analysts claim makes the bulk of the profit and revenue for SpaceX. Presumably Starlink connectivity and technology would be used in SpaceX’s orbital data centers, giving it an advantage in the space, and maybe another reason Google is in talks with SpaceX.
Pras Subramanian is the Lead Transportation Reporter for Yahoo Finance. You can follow him on X and on Instagram.
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