❯ SpaceX seeks $40 billion of debt, led by Apollo, to buy Nvidia chips

$40 billion for chipsAccording to the Financial Times, citing people familiar with the matter, as relayed by InvestingLive, SpaceX is seeking to raise $40 billion of debt to buy Nvidia AI chips. About $10 billion would be bank loans and about $30 billion investment-grade debt, with Apollo Global Management leading and bond fund Pimco among a small group in talks to provide financing. The transaction is expected to close in 2027.

A rocket company's AI businessSpaceX absorbed Musk’s xAI before its June IPO and runs the Grok model in data centers called Colossus, using Nvidia hardware exclusively. It also rents compute to other AI developers, including Anthropic and Google. The report says Colossus 2 could more than double its Nvidia chip count by December.

AI as a major debt issuerMorgan Stanley estimates AI infrastructure will need $1.5 trillion in external financing by 2028. Large AI-related deals have followed one another in bond markets this week, with Broadcom’s bank group seeking investors for $60 billion of chip financing and Waymo enlarging its own borrowing. After the news, SpaceX shares fell about 1% in extended trading and Nvidia rose about 0.5%.

Nvidia's customers are borrowing to orderThis money ends up as Nvidia’s revenue, but it is repaid from SpaceX’s cash flow from renting compute and running models. Once Apollo distributes the debt, the risk sits with the investors who buy it. If compute rents fall or customers leave, the pressure travels back along that chain.

▮ SIGNALMore and more of Nvidia’s orders are being paid for with customers’ debt, so the strength of chip demand is now tied to how much credit markets are willing to lend.