Why it matters
- SpaceX is in talks to raise about $40 billion, roughly $10 billion of bank loans and $30 billion of investment-grade debt, to buy Nvidia chips, the Financial Times reported.
- Apollo Global Management is leading the financing, with Pimco among the lenders in talks; the talks are at an early stage and the deal is expected to close in 2027.
- SpaceX shares were down about 2.3% at $167.91 before the bell on Wednesday, after rising 16% over the previous three sessions, according to Yahoo Finance data.
SpaceX is in talks to borrow as much as $40 billion to buy Nvidia artificial intelligence chips, the Financial Times reported. SpaceX shares fell about 2.3% in premarket trading on Wednesday, Oct. 7.
The package would combine about $10 billion of bank loans with about $30 billion of investment-grade debt, according to the FT report as summarized by investingLive. Apollo Global Management is leading the effort, and bond manager Pimco is among the lenders in talks. The deal is expected to close in 2027.
Discussions with banks and investors are still at an early stage, Techzine reported, citing Bloomberg. No company statement on the financing was available.
How did SpaceX stock react?
SpaceX (SPCX) traded at $167.91 at about 8:50 a.m. Eastern time, down 2.3% from Tuesday's close of $171.92, according to Yahoo Finance data. The stock had climbed about 16% in the three sessions before that, from $148.07 on Oct. 1.
Part of the drop matched the wider market. Nasdaq 100 futures were down about 0.7% and S&P 500 futures about 0.4% at the same time, Yahoo Finance data showed. Nvidia shares were down about 0.9% at $237.10 premarket, from a close of $239.24.
| Premarket, Oct. 7 (about 8:50 a.m. ET) | Price | Change from Oct. 6 close |
|---|---|---|
| SpaceX (SPCX) | $167.91 | -2.3% |
| Nvidia (NVDA) | $237.10 | -0.9% |
Source: Yahoo Finance data.
What will SpaceX use the money for?
The chips would power SpaceX's AI computing, including the Grok AI model that runs in its Colossus data centers, according to investingLive. Elon Musk has said the company will use Nvidia hardware exclusively in those facilities. Techzine described Musk's AI company xAI as a SpaceX subsidiary.
Techzine reported that the Colossus 2 cluster near Memphis already holds 110,000 Nvidia GB200 chips and 440,000 GB300 chips, and that Apollo was involved in an earlier $7 billion financing of Nvidia hardware for the project.
Why does the debt deal matter for markets?
The size of the deal shows how much borrowing the AI build-out now needs. Morgan Stanley estimates AI infrastructure will require $1.5 trillion of outside financing by 2028, investingLive reported, and Goldman Sachs has cited AI-related corporate bond sales as one factor behind rising U.S. Treasury yields. The U.S. 10-year yield was about 5.34% on Wednesday morning, according to Yahoo Finance data.
For more on the businesses moving markets, see our companies section. Yesterday, Constellation Energy jumped on a Google nuclear power deal tied to data-center demand. In Europe, German industrial production jumped 2.0% in August.
Sources
- investingLive, SpaceX seeks $40 billion in debt led by Apollo to fund Nvidia chip order, FT says
- Techzine Global, SpaceX wants to borrow $40 billion for Nvidia chips
- Yahoo Finance, SpaceX (SPCX) quote
- Yahoo Finance, Nvidia (NVDA) quote
- Yahoo Finance, 10-year Treasury yield (^TNX)
