SpaceX Seeks $40 Billion in Debt to Buy Nvidia Chips
Synopsis
SpaceX wants $40 billion in bank loans and borrowed money, led by Apollo, to buy Nvidia AI chips, the Financial Times says.
Key Highlights
- The Financial Times reported that SpaceX is raising $40B to purchase AI chips from Nvidia.
- Apollo Global Management is expected to lead the deal.
- Around $10 billion could come from bank loans, while another $30 billion would be borrowed from investors.
- Morgan Stanley estimates that the AI industry may need $1.5 trillion from outside lenders by 2028.
- SpaceX shares dropped 1% following the report, while Nvidia shares gained 0.5%.
What Happened
SpaceX is reportedly looking to help borrow $49 billion to purchase AI from AI chips from Nvidia. The Financial Times reported.
Apollo is expected to take the lead of the financing and bring lenders to provide the funds. Pimco, one of the world’s largest bonded investors is reportedly in conversation to join a small group of lenders. The deal could be completed by 2027.
Of the total $40 billion, roughly $10 billion would come through bank loans. The remaining $30 billion would be raised from investors through loans viewed as relatively low risk. SpaceX went public in June and raised a record $86 billion. Last month, Musk said the Colossus 2 data center operated by his AI company, xAI, could more than double its Nvidia chip capacity by December. He has also said SpaceX plans to use Nvidia hardware exclusively in its data centers.
Nvidia also teamed up in August with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR. The group is working on financing structures that could help raise more than $500 billion for AI-related projects.
Why It Matters
AI infrastructure is incredibly expensive. Companies need huge quantities of advanced chips and massive data centers, creating enormous financing requirements. Morgan Stanley estimates that the industry could need $1.5 trillion from outside lenders by 2028.
At the same time, lenders and investors are becoming more cautious about where they put their money.
SpaceX’s reported plan is a good example of how companies are trying to fund the AI boom. Instead of paying entirely with their own cash, they are turning to debt and outside investors. Nvidia is positioned at the center of this trend, not only as a major chip supplier but also as a participant in broader AI financing efforts.
What Founders Can Learn
Even a company as large as SpaceX may need significant debt to fund its biggest investments. In the AI race, having enough capital can be just as important as having the right technology.
There is also a trade-off. SpaceX would be relying heavily on a single chip supplier while taking on a substantial amount of debt. That provides access to the hardware it needs, but it also creates a long-term financial obligation that remains even when business conditions become difficult.
The Inspirepreneur Question
If even SpaceX needs outside funding to keep pace with the AI infrastructure race, what does that tell us about the true cost of staying competitive?
And how much financial risk should a company be willing to take to make sure it doesn’t get left behind?
Source: Reuters
At Inspirepreneurs Magazine, covering entrepreneurship, business failures, and the human stories behind the world's most ambitious founders. She writes at the intersection of strategy and storytelling.
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