AI: Google & Anthropic help paint Elon's SpaceX/xAI IPO fence. AI-RTZ #1110
The Bigger Picture, Sunday June 7 2026
It’s the season of mega-AI IPOs this AI Tech Wave, and the three contenders are pulling out all the steps to appear as it they’re gilding the lily. Make the deals look even better than they might seem to be to beholders and potential investors. Elon Musk with his first up SpaceX/xAI up with its $1.75+ trillion IPO this week is a case in point. And that is the Bigger Picture I’d like to unpack this Sunday.
It’s Elon Musk’s take on Tom Sawyer getting the neighborhood kids to pay him to whitewash his fence.
So far he’s got both Anthropic and Google now to pay him $40 and $30 billion dollars respectively to rent out his excess AI Data Centr capacity in his Colossus complex. At a clip of $1.25 billion to $920 million per month for Anthropic and Google respectively. Cancelable with short-term notice by each party.
The WSJ lays out the latest in “Google to Pay SpaceX Nearly $1 Billion a Month in Cloud-Computing Deal”:
“The deal gives SpaceX a new stream of revenue for its artificial-intelligence business ahead of IPO”.
“Google will rent data-center capacity from SpaceX for $920 million monthly, involving 110,000 Nvidia chips.”
“SpaceX is expanding its artificial-intelligence business ahead of an IPO valued at $1.77 trillion.”
“SpaceX also secured a deal with Anthropic, which agreed to pay $1.25 billion monthly for compute capacity.”
“Google has agreed to rent data-center capacity from SpaceX, expanding the rocket company’s artificial-intelligence business ahead of its initial public offering.”
“Google will pay SpaceX $920 million a month from October 2026 to June 2029 in a deal that includes the computing capacity of at least 110,000 Nvidia chips, according to a SpaceX securities filing on Friday.”
“The deal will ramp up over the summer, and Google has the right to cancel the agreement in October if SpaceX doesn’t provide the promised chips, SpaceX said. Either party can cancel the agreement starting next year with 90 days’ notice.”
The trick of course is that Elon got more than one company to help him paint his fence.
It makes his IPO look better.
Like Elon forcing his plethora of banking underwriters and other vendors to all commit tens of millions plus of dollars to use his AI software in their businesses ahead of his IPO.
“This is the second major deal SpaceX has made in recent months to rent out computing capacity to a competitor. The rocket company is expected to go public on June 12 in a public offering that values the company at $1.77 trillion.”
“It has pitched investors on the deal by promoting its plans to build data centers in space, a nascent technology that has gained traction as tech companies face expensive energy bills from running data centers on Earth. Meanwhile, SpaceX has had excess capacity in its Colossus data centers, initially built to train its own AI model Grok.”
It helps of course that Google is an early investor in SpaceX, a necessary condition for many of these types of Elon IPO prepping deals.
“Google, a subsidiary of Alphabet was an early investor in SpaceX. Google executive Donald Harrison sits on the SpaceX board.”
“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,” a Google Cloud spokesperson said.”
Google has already helped Elon dress up his pie in the sky plans for AI Data Centers in Space, a concept I’ve discussed in detail for their truly stretched scientific and financial aspirations.
“The companies had previously discussed working together to send data centers to space, The Wall Street Journal reported last month. Google, which has its own cloud data-center business, has plans to launch its own orbital data centers by 2027 as part of a moonshot initiative called Project Suncatcher. It is working with another company, Planet Labs, to build those satellites.”
The xAI deal with Anthropic was a matter of tactical needs by both companies. Despite signs that xAI was using multi-party distillation efforts on Anthropic’s Claude models to train their own versions.
Which are generally not allowed by the LLM AI companies and are typical violation of service terms. And not necessarily a long-term, trust-filled business partnership. Elon Musk still talks about it in the short term as per this Information piece:
“And in posts on X in recent days, Musk has repeatedly described the Anthropic deal as short-term. In a post on Tuesday, he said he wanted the Anthropic deal to be short-term because “I thought we might need the compute back at some point.”
So Anthropic may summarily stop painting the fence at any point they can get alternative compute.
Elon of course takes every opportunity to talk about these developments ahead of the IPO.
“Speaking at a JPMorgan event on Thursday, Musk said that SpaceX plans to make its future orbital data centers able to run chips from multiple companies and said it could run Google’s proprietary technology.”
“In May, Anthropic announced plans to rent 220,000 Nvidia chips from SpaceX, before expanding the deal soon after. In the announcement, Anthropic said it was also interested in discussing using orbital data centers from SpaceX if the company successfully launches that product.”
“In its IPO prospectus, SpaceX said that Anthropic agreed to pay $1.25 billion a month for compute capacity in the Colossus data center built by xAI, in a deal that runs through 2029.”
Many observers have already made the fundamental valuation for this IPO as being under $780 billion or less, leaving over a trillion dollars of aspirational valuation for SpaceX/xAI around AI Space Data Centers, his Terafab chip factories that rival Taiwan Semiconductor, TSMC, and its Starlink broadband satellite network that provides over 50% of the revenues to its SpaceX rocket launching business.
Yes, the SpaceX that bought $131 million in excess Cybertrucks from Elon’s other public company Tesla to help out there with its $1.4+ trillion valuation.
The one also trading for a trillion dollar plus over its fundamental car company valuation on humanoid Optimus robots and eventually ubiquitous robotaxis. Just more likely from other companies like Google Waymo, Uber, Nvidia and others.
Even with his AI data center assists by Anthropic and Google, the IPO still is being price at over 50 times revenue vs 15x for Tesla. Which itself competes with Toyotoa, the largest auto company in the world, trading at 0.75x its 2025 revenues. And around 3.6x for the S&P 100 and 500.
Lot of folks enchanted by Elon’s fables about Space, Rockets, Mars and beyond. For now.
The S&P that decided not to include SpaceX early into its index for passive investment funds running $10 trillion and more. Unlike the other Nasdaq passive index fund folk, who succumbed to the temptation of helping Elon whitewash his SpaceX IPO fence. Making sure ‘We are the Geese’ as I’ve put it.
None of this discussion is stock commentary. But it’s useful to understand the relative financials and what’s being asked from the biggest cluster of individual investors in the public markets than ever.
Over $30 billion of SpaceX’s expected $75+ billion proceeds to be raised this week are from individuals. And of course a lot of insitutions like Fidelity and others who’ve already made a lot of paper gains on the private side of Space/xAI to date.
It’s all part of the Bigger Picture in this mega-AI IPO stage of this AI Tech Wave this week.
While we watch Elon’s fence get painted as an extraordinary mega-AI IPO sees it journey begin this week. Stay tuned.
(NOTE: The discussions here are for information purposes only, and not meant as investment advice at any time. Thanks for joining us here)
