SpaceX Seeks $40 Billion Financing to Purchase Nvidia Chips for AI Infrastructure Expansion

SpaceX Financing Deal Targets $40 Billion for Nvidia AI Chips

SpaceX is pursuing a $40 billion financing arrangement led by Apollo Global Management to purchase Nvidia chips, marking one of the largest AI infrastructure investments to date1

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. Elon Musk's rocket and AI company is seeking approximately $10 billion in bank loans and $30 billion in investment-grade debt for this blockbuster chip order1

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. The transaction, expected to close in 2027, underscores the massive capital demands of the AI boom as technology companies race to secure advanced processors and build computing infrastructure needed to support AI development2

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Apollo Global Management Leads Investment-Grade Debt Offering

Apollo Global Management is expected to lead the deal and help place the debt with a broad range of investors, leveraging its $800 billion credit business1

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. PIMCO is among a small group of lenders in talks to fund the SpaceX financing1

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. Insurance and pension funds will be able to participate in purchasing SpaceX's debt due to its BBB credit rating, the second-lowest investment-grade ranking1

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. Apollo has established itself as a leader in high-grade company lending, previously orchestrating a $35 billion chip financing deal in June for processors made by Nvidia rival Broadcom, which marked the largest private credit transaction at that time1

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Exclusive Partnership Strengthens Nvidia Chips Procurement Strategy

The deal will strengthen ties between SpaceX and Nvidia as Musk commits to building exclusively on Nvidia technology for his AI initiatives1

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. During SpaceX's earnings call in August, Musk stated, "We've decided to build exclusively on Nvidia because we think the Vera Rubin architecture is the best architecture. We think it's the best AI computer, and we greatly value our close co-operation and partnership on many levels with Nvidia"1

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. The company plans to use Nvidia hardware exclusively to build its Colossus data centers, which power the flagship Grok AI chatbot3

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. Musk indicated last month that xAI's Colossus 2 data center could more than double the number of Nvidia chips it uses by December2

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AI Hardware Procurement Reflects Industry-Wide Capital Requirements

Morgan Stanley estimates that AI infrastructure will require $1.5 trillion in external financing by 2028, even as lenders and investors grow more cautious about funding the industry's expansion2

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. The semiconductor industry is witnessing unprecedented investment as companies compete for cutting-edge processors. In August, Nvidia announced it was working with some of the largest firms on Wall Street on a $500 billion funding platform, signing memorandums of understanding with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR1

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. This consortium aims to create pools of third-party capital to finance the acquisition of Nvidia's chips and broader build-out of AI infrastructure at lower borrowing costs for smaller clients, with Nvidia potentially backstopping up to 25 percent of the chip value1

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Market Response and Computing Capacity Expansion Plans

SpaceX secured an investment-grade rating shortly after its $86 billion initial public offering in June and sold $25 billion in high-grade bonds less than two weeks later1

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. However, the bonds sold off in following days due to concerns over mounting debt and heavy capital expenditure, with bonds maturing in 2056 trading at about 85 cents on the dollar1

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. Some investors expressed concern over Musk's limited financial disclosures, with one noting they received only a short two-page deal memo with pictures of outer space and an arrow indicating the company would build data centers "somewhere in the universe"1

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. Despite these concerns, SpaceX has signed deals to rent out computing capacity from Colossus to other major AI developers, chiefly Anthropic and Google3

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, positioning itself as a key infrastructure provider in the AI ecosystem.