World's richest man Elon Musk's SpaceX seeks $40 billion to buy Nvidia chips

SpaceX, the rocket and artificial intelligence company controlled by Elon Musk, is in talks to borrow as much as $40 billion to buy Nvidia chips, in what could become one of the largest debt financings of the AI boom.

The financing, led by Apollo Global Management, would combine about $10 billion in bank loans with $30 billion in investment-grade debt, the Financial Times reported on Tuesday. Pacific Investment Management is among the investors looking at the deal, Bloomberg reported. SpaceX, Apollo and Nvidia did not immediately comment.

SpaceX shares fell in after-hours trading after the report, as investors weighed the cost of the company’s AI ambitions.

Building AI on Nvidia

The borrowing would fund a large order of Nvidia processors for SpaceX’s data centers. Musk has said the company will use Nvidia hardware exclusively, and said last month that the Colossus 2 data center could more than double its number of Nvidia chips by December. SpaceX took over Musk’s AI company, xAI, in February and renamed it SpaceXAI.

The deal shows how heavily the AI race now depends on borrowed money. Morgan Stanley estimates that AI infrastructure will need $1.5 trillion in external financing by 2028. In August, Nvidia partnered with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR on financing platforms meant to mobilize more than $500 billion for AI projects.

Not everyone is comfortable with the pace. Ray Dalio, the founder of Bridgewater Associates, called AI a “classic bubble” this week and warned that rising interest rates could help bring it to a breaking point.

Musk, who was born in Pretoria, took SpaceX public in June in a record IPO and briefly became the world’s first trillionaire. Forbes estimates his fortune is now just above $1 trillion.