Elon Musk's SpaceX lenders sell pieces of $40 billion chip deal

Goldman Sachs Group Inc. and Apollo Global Management Inc. have begun selling pieces of a roughly $40 billion financing that will pay for artificial intelligence chips for SpaceX, the rocket and AI company controlled by American billionaire Elon Musk.

The two firms are asking some investors to take stakes of as much as $500 million before the formal syndication of the debt begins. The package includes an $8.3 billion senior secured loan, which Goldman led and will sell to banks, and several bond tranches aimed at asset managers, with Apollo as a principal investor in the bonds and Pacific Investment Management Co. also taking part. Goldman declined to comment.

SpaceX shares fell nearly 4% to $135.92 on Wednesday, Nov. 4, and slipped more than 2% in overnight trading as word of the sale spread.

How the deal works

SpaceX announced the financing on Oct. 26, calling it the largest committed GPU financing on record. Rather than borrowing the money itself, SpaceX will lease the equipment. A special-purpose vehicle managed by Atlas SP, an Apollo-backed company, will buy Nvidia Corp.'s next-generation Vera Rubin chips and related server hardware, raise the money through the loans and bonds, and rent the gear to SpaceX. The structure keeps the debt off SpaceX's own balance sheet and helps shield its corporate credit ratings.

SpaceX has agreed to repay about $40 billion in principal, plus interest and fees, under a master finance lease. Each batch of equipment carries a lease of about five to five and a quarter years, starting when it is delivered, which is expected in the first half of 2027. Together with a $7 billion lease prepayment from SpaceX, the deal covers about $47.3 billion of chips and equipment. The company expects the transaction to close before the end of 2026.

SpaceX must keep paying rent even if the equipment is damaged or knocked out by events beyond its control. It does not guarantee what the chips will be worth when the leases end, which leaves that risk with investors.

Goldman acted as sole structuring agent. Funds managed by BlackRock Inc. and Goldman Sachs Asset Management, along with accounts advised by KKR & Co., made anchor commitments when the deal was announced.

Chief Financial Officer Bret Johnsen said at the time that demand for computing power was accelerating and that SpaceX was seeing "less than one year payback periods" on its AI infrastructure. The lease, he said, "diversifies our funding sources."

Spending on AI

The chips will feed the AI business SpaceX took on when it absorbed Musk's xAI in February. That includes the Grok chatbot and the Colossus data centers in Memphis, Tennessee, where SpaceX trains its models and rents computing capacity to Anthropic and Google.

AI brought in $7.6 billion of SpaceX's $14.6 billion in third-quarter revenue, more than its Starlink satellite internet and launch businesses combined. Capital spending rose to nearly $20 billion in the quarter, from $6.9 billion a year earlier, and the company expects to spend $35 billion to $40 billion in the fourth quarter alone.

SpaceX has leaned heavily on debt markets this year. It sold $25 billion of senior unsecured bonds in June, mostly to repay a $20 billion bridge loan used to refinance debt at X and xAI, after Moody's, S&P and Fitch gave it investment-grade ratings. It also raised about $86 billion in its June initial public offering, the largest on record.

Lenders committed to the chip deal before its pricing was set, and the market for AI infrastructure debt has cooled since then as investors grow wary of heavy spending and thin profits at companies such as CoreWeave Inc.

Musk said in October that SpaceX's investment-grade status and its cash flow from Starlink and launches gave it access to debt markets that have "almost entirely shut off access to money" for companies whose revenue depends on renting out AI data centers. "The 200+ neoclouds are going to see guppy-level death and consolidation," he wrote on X.