3 hrs ago
SpaceX’s Reported $40 Billion Nvidia Deal Tests AI Debt Markets
SpaceX reportedly wants to raise about $40 billion to buy Nvidia computer chips.
The chips would help it build computing systems and data centres for artificial intelligence.
The plan includes bank loans and investment-grade debt, which is a way for a company to borrow from investors.
Apollo is expected to lead the financing, and Pimco has also discussed taking part.
SpaceX has a BBB credit rating, which could make the debt available to some large investors.
However, some investors are cautious because SpaceX has borrowed money, is spending heavily and shares limited financial information.
The deal is expected to close in 2027.
The plan shows how much money companies are seeking to build AI infrastructure.
SpaceX is reportedly seeking about $40 billion to fund a major purchase of Nvidia AI chips.
The financing is expected to include about $10 billion in bank loans and $30 billion in investment-grade debt.
Apollo Global Management is expected to lead the deal, while Pimco is among lenders reported to have discussed financing.
The transaction is expected to close in 2027; SpaceX plans to use Nvidia hardware exclusively for its data centres, according to Elon Musk.
Investors may be able to buy the debt because of SpaceX’s BBB rating, but some have raised concerns about its debt, project spending and limited financial disclosures.
- Who
- SpaceX is seeking the financing; Apollo Global Management is expected to lead it, with Pimco among lenders in discussions.
- What
- A reported $40 billion financing plan for a major purchase of Nvidia AI chips, including about $10 billion in bank loans and $30 billion in investment-grade debt.
- Where
- The articles do not specify a location for the financing.
- When
- The transaction is expected to close in 2027.
- Why
- To fund Nvidia chip purchases and expand AI computing and data-centre capacity.
Financing opportunity
Investor concerns
Access to debt investors
Financing opportunity
SpaceX’s BBB investment-grade rating could make its debt available to insurers and pension funds, which generally face stricter limits on junk-rated debt.
Investor concerns
Some investors have been cautious about SpaceX debt because of the company’s rising debt, heavy spending on new projects and limited financial disclosures.
AI infrastructure financing
Financing opportunity
The proposed deal would help finance chips and data-centre capacity as companies race to build AI infrastructure.
Investor concerns
The reports describe growing caution among lenders and investors about financing the sector’s rapid expansion; SpaceX’s earlier high-grade bonds came under pressure after investors raised concerns.
Key facts
- Reported financing
- About $40 billion
- Planned bank loans
- About $10 billion
- Planned investment-grade debt
- About $30 billion
- Expected lead arranger
- Apollo Global Management
- Other lender in talks
- Pimco
- Expected closing
- 2027
- SpaceX rating
- BBB, described as the second-lowest investment-grade rating
- SpaceX bonds due in 2056
- Reportedly trading at about 85 cents on the dollar, with yields about 2.27 percentage points above comparable US Treasury yields
Quotes
Elon Musk
SpaceX chief executive, speaking during the company’s earnings call in August.
“We think it’s the best AI computer, and we greatly value our close co-operation and partnership on many levels with Nvidia”
financialexpress.com
“We’ve decided to build exclusively on Nvidia because we think the Vera Rubin architecture is the best architecture”
financialexpress.com
Sources
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