Elon Musk's SpaceX is reportedly seeking to raise $40 billion in financing to purchase Nvidia chips for its AI initiatives.
The AI and rocket firm is looking to raise around $10 billion in bank loans and $30 billion in investment-grade debt, The Financial Times reported Wednesday, citing people familiar with the matter.
Private capital group Apollo Global Management is expected to lead the deal and help sell the debt to investors, while bond group Pimco is among a small group of lenders in talks to fund it, the outlet said. The transaction is expected to close in 2027.
Insurance and pension funds are among those able to buy SpaceX's debt given its investment-grade BBB credit rating, secured after its $86 billion initial public offering in June. The firm previously sold $25 billion worth of bonds within two weeks of going public, but they sold off days later due to concerns over SpaceX's debt and capital expenditure commitments, the FT noted.
The reported financing plans come amid a boom in AI data center, chip, and infrastructure spending as firms seek to keep up with compute demand.
Apollo and Pimco declined to comment to the FT. SpaceX and Nvidia did not respond to requests for comment. The Latent has also reached out to the firms for comment.
Strengthening SpaceX and Nvidia ties
The potential deal would strengthen the relationship between SpaceX and Nvidia after Musk recently vowed to double down on Nvidia's technology for SpaceX's AI initiatives.
"We've decided to build exclusively on Nvidia because we think the Vera Rubin architecture is the best architecture," Musk said during SpaceX's earnings call in August. "We think it's the best AI computer, and we greatly value our close co-operation and partnership on many levels with Nvidia."
SpaceX (Nasdaq: SPCX) stock closed up 0.5% on Tuesday at $171.92 and is currently down 1.9% in pre-market trading on Wednesday, per TradingView. Shares peaked at just over $200 in June following its IPO.