Google owns 4.9% of SpaceX worth over $100B. A new $30B AI compute deal cements the bond between Musk's empire and Alphabet, despite a decade-old personal rift.
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Alphabet owns 4.9% of SpaceX, a stake now worth more than $100 billion. That makes Google's 2015 investment of $900 million the most lucrative private-market bet in the company's history. The two empires are closer than ever, even as the personal relationship between Elon Musk and Google co-founder Larry Page remains fractured.
The rift traces back to Musk's 44th birthday party in June 2015. Page reportedly called Musk a "speciesist" for favoring humans over digital life forms during a debate about AI risk. That same year, Musk co-founded OpenAI as a counterweight to Google DeepMind. He also recruited Ilya Sutskever away from DeepMind to lead the new lab.
Google's 2015 investment in SpaceX came just months before the birthday blowup. The search giant bought roughly 4.9% of the rocket maker, a stake that has appreciated enormously as SpaceX's valuation soared past $2 trillion ahead of its recent IPO.
In 2021, Google deepened the relationship by signing a seven-year deal to provide cloud infrastructure for SpaceX's Starlink satellite internet service. At the time, SpaceX had about 1,500 Starlink satellites in orbit and roughly 500,000 subscribers. Google's private fiber-optic network gave Starlink faster connections to cloud services.
Earlier this month, SpaceX became a cloud provider to Google. The company agreed to lease AI compute capacity to Google for $920 million a month over 32 months. The deal could bring $30 billion in revenue to SpaceX's Colossus data centers in Memphis, Tennessee. A Google Cloud spokesperson told CNBC the capacity was needed "to ensure we have bridge capacity to meet surging customer demand for our agent platform, Gemini Enterprise."
SpaceX said in filings that Google can end the agreement after a one-month grace period if SpaceX fails to deliver the required AI chips by Sept. 30. After this year, either party can terminate with 90 days notice.
Google launched its self-driving car project in 2009, now known as Waymo. Tesla at the time was still taking orders for the Model S, a sedan it had not yet begun manufacturing. By 2020, Musk was publicly bashing Waymo, claiming Tesla's camera-based system would surpass Waymo's lidar-dependent approach.
Waymo now operates thousands of robotaxis across 11 U.S. cities, providing more than 500,000 paid trips each week. Tesla has roughly 50 Robotaxi-branded vehicles operating mostly in Austin, Texas, according to public records. Tesla does not yet sell the fully unsupervised system Musk has promised.
The personal drama added another layer. In December 2021, Musk had an alleged affair with Sergey Brin's then-wife Nicole Shanahan, as reported by the Wall Street Journal. Musk denied the affair. Shanahan later denied it as well, calling the aftermath "debilitating." She became Robert F. Kennedy Jr.'s running mate in 2024 and now serves as health secretary under President Trump.
For investors, the key takeaway is financial, not personal. Alphabet's $100 billion stake in SpaceX is a windfall from a single bet made a decade ago. The new AI compute deal shows the two companies are willing to do business even as their founders keep their distance.
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