Elon Musk’s SpaceX wants to borrow $40 billion to buy more Nvidia chips. The company is in talks with Apollo Global Management and other banks to help SpaceX finance the purchase, according to the Financial Times.
SpaceX makes money from rocket launches and Starlink internet subscriptions. It also makes money from renting out data center space to AI companies. Now, the company wants to take on a huge debt to buy more AI chips than almost anyone else on the planet for its data center business.
Once investors heard the news about the debt, SPCX shares dropped.
Shares closed at $167.60 on Wednesday, Oct. 7, after the news broke, falling 2.5% during the session. However, at the time of writing, SPCX is still up by around 8.82% over the past month.
Inside the $40 billion Apollo-led financing push
The Apollo-SpaceX talks are still in the preliminary stages, and the proposed package is divided into two.
According to the Financial Times, about $10 billion will come from a group of commercial banks, while the remaining $30 billion will be raised through investment-grade corporate bonds.
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When SpaceX went public in June 2026 and raised $86 billion at the time, it earned a BBB credit rating. Think of that credit rating as a safety score high enough for big pension and insurance funds to feel comfortable buying the new bonds.
The investment-grade rating is what allows large bond investors such as Pimco, which is among the lenders in talks, to participate at scale.
What I find unusual about the deal is what SpaceX is using as collateral — the chips themselves. Still, terms haven’t been finalized, and lenders have questioned whether advanced GPUs hold their value well enough to secure a loan this size.
I’ve been following the AI market for a while, and I’ve seen several financing deals. Still, seeing physical chips potentially being used as collateral for a loan of this scale is quite new to me, and it shows just how valuable these chips have become.
SpaceX is exploring a $40 billion financing package to fund a massive Nvidia AI chip purchase.
Why Musk is going straight to Nvidia hardware
Musk has said SpaceX will build its data centers using only chips from Nvidia, which is why he wants to secure a large number of chips now.
He also plans to more than double the number of GPUs at the Colossus 2 site by December.
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SpaceX already rents out space at its first Colossus center to customers such as Anthropic, and the site already brings in steady income for the company.
That’s one reason bondholders are willing to lend such a large sum to SpaceX to get more chips.
The debt load risk for SPCX shareholders
Locking in $40 billion worth of chip orders solves a supply issue for SpaceX, but the debt it is incurring to do so has its own risks.
SpaceX now carries far more debt compared to its earnings than companies like Alphabet or Meta, and that’s something many investors are worried about.
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Michael Burry of Scion Asset Management has publicly talked about the risks of circular AI financing, as The Motley Fool noted. His main warning is that chipmakers and AI developers are simply funding each other.
This creates an artificial feedback loop where major tech firms invest billions into AI startups, only for those startups to immediately hand that money back to purchase chips and cloud infrastructure. Instead of growing from real, outside customer demand, the AI boom is sustaining itself on a closed circuit of capital.
If these AI developers cannot quickly find a way to profitably monetize their software to everyday consumers, this financial loop risks collapsing like a house of cards, leaving chip manufacturers holding billions in unpaid hardware bills.
What this means for Nvidia
Nvidia is not just selling chips to SpaceX. It also owns about $21 billion worth of SpaceX stock, as of its latest filing, and also co-launched $500 billion in AI-infrastructure financing platforms with Apollo and five other firms.
It means all three companies are actually closely linked.
Being tied to each other means their success is also interdependent. If the AI buildout begins struggling later, it could affect all of them. And if it rises, they will all benefit.
