Apollo and banks in talks to finance SpaceX's $40 billion Nvidia GPU purchase

SpaceX Seeks Major GPU Financing

SpaceX is in discussions with Apollo Capital Management and several banks to secure financing for a $40 billion purchase of Nvidia graphics processing units. This financing effort follows SpaceX's previous tap into the investment-grade debt market four months prior, where it raised $25 billion in bonds.

Financing Structure and Collateral

The proposed $40 billion deal is expected to rely on the investment-grade debt market. Sources indicate that the Nvidia GPUs themselves would likely serve as collateral for this debt. Apollo Capital is reportedly playing a leading role in facilitating this financing arrangement.

Market Context for AI Debt

While AI-related bonds have recently seen sell-offs and widening credit spreads, the market still anticipates GPUs to retain value for approximately seven years due to ongoing scarcity in computing power. This expectation supports the value of high-performing GPUs as collateral. This financing follows similar large bond issuances from companies like Meta, Amazon, and Google, reflecting the increasing cost of AI infrastructure buildout.

SpaceX's AI Infrastructure Expansion

SpaceX is already a significant user of Nvidia AI chips. CEO Elon Musk stated in September that the company's Colossus data center in Memphis, Tenn., operated 230,000 Nvidia AI chips, with Colossus 2 having 550,000. SpaceX plans to more than double its chip count to 1.21 million by late December. This expansion supports compute deals with partners like Google, Anthropic, and Reflection AI, potentially boosting revenue.