Google will pay SpaceX $920 million per month for AI computing capacity in a deal estimated to total approximately $30 billion over 32 months. This agreement suggests strong prospects for Microsoft’s Azure cloud business, according to BNP Paribas analyst Stefan Slowinski. He notes that the demand for AI infrastructure is significantly outpacing available supply across the industry.
Under the terms disclosed in a regulatory filing on June 5, Google will access about 110,000 Nvidia GPUs housed in SpaceX data centers starting October 2026, with a reduced fee during a ramp-up phase until September 2026. Google retains the right to terminate the contract if SpaceX fails to deliver the agreed GPU capacity by September 30, 2026.
SpaceX’s agreement with Google follows a separate contract worth $1.25 billion per month with Anthropic, increasing SpaceX’s total annual recurring revenue from AI computing to approximately $26 billion.
BNP Paribas maintains a Buy rating on Microsoft, with a price target of $555. Slowinski stated that if pricing strengthens during future contract renewals, Azure’s growth rate could rise to the mid-40s percent range. Azure revenue grew 40% year-over-year in the March quarter, exceeding Microsoft’s guidance.
Microsoft reported $627 billion in commercial remaining performance obligations, which reflect contracted future revenue. Slowinski anticipates Azure’s growth will remain above 40% in upcoming quarters, driven by increased AI infrastructure capacity. He raised concerns about potential price increases for Azure due to rising memory and CPU costs, particularly for AI-related contracts nearing renewal.
Improving feedback from Microsoft Copilot users supports Slowinski’s assertion that the market may not have fully recognized Azure’s growth potential.
