SpaceX Seeks $40 Billion to Buy Nvidia Chips as AI Debt Concerns Intensify

Key Takeaways

• SpaceX is reportedly discussing a $40 billion financing package to fund a major purchase of Nvidia AI chips.
• The proposed structure includes approximately $10 billion in bank loans and $30 billion in investment-grade bonds.
• SpaceX’s five-year credit-default-swap spread surged to a record 194 basis points as investors questioned the company’s rapidly expanding debt burden.
• The deal would strengthen Nvidia’s AI-chip order book but intensify concerns that the AI infrastructure boom is becoming increasingly dependent on borrowed money.

SpaceX is reportedly seeking $40 billion in new financing to purchase Nvidia artificial intelligence chips, marking one of the largest funding packages yet linked to the global AI infrastructure boom.

The proposed transaction would include approximately $10 billion in bank loans and $30 billion in investment-grade bonds, according to people familiar with the discussions. Apollo Global Management is expected to lead the financing, while bond manager Pimco has also participated in preliminary talks.

The transaction is still being negotiated and is expected to close in 2027. SpaceX, Nvidia, Apollo and Pimco have not publicly confirmed the final terms, meaning the size and structure could change.

SpaceX stock fell 2.5% to $167.60 following the reports, while Nvidia declined approximately 0.7%. SpaceX shares remain well below their 52-week high of $225.64.

How Would the $40 Billion Financing Work?

The reported package would be divided between bank and bond markets:

Apollo is expected to arrange the transaction and distribute the debt among institutional investors. Pimco is reportedly among the large fixed-income managers considering participation.

The deal may also use Nvidia chips or related computing infrastructure as collateral. High-end GPUs retain significant resale value because demand continues to exceed supply, allowing lenders to treat the hardware as a financeable asset rather than a conventional operating expense.

This type of arrangement is becoming more common across the AI industry. Instead of paying entirely from existing cash flow, technology companies and data-center operators are financing processors, power infrastructure and server capacity through loans, bonds and private-credit vehicles.

However, SpaceX’s proposed financing is unusually large. The $40 billion package is close to its projected 2026 revenue of approximately $44.5 billion, illustrating the scale of the company’s AI ambitions and the financial risks involved.

Why Does SpaceX Need So Many Nvidia Chips?

SpaceX is expanding beyond rockets and satellite connectivity into artificial intelligence, cloud computing and data-center infrastructure.

Elon Musk has described Nvidia’s architecture as the preferred platform for the company’s AI workloads. SpaceX is expected to receive a significant allocation of Nvidia’s next-generation Vera Rubin systems, which are designed for training advanced models and running large-scale inference workloads.

The chips could support several parts of Musk’s growing technology ecosystem:

• Training and operating frontier AI models;
• Expanding xAI’s computing capacity;
• Building terrestrial data centers;
• Processing data generated by Starlink and Starshield;
• Supporting automated spacecraft and robotics;
• Developing proposed orbital data centers.

SpaceX has set increasingly aggressive computing targets. The company is reportedly seeking to increase its AI capacity from approximately 1.4 gigawatts in the second quarter to 2 gigawatts by the end of 2026, with the longer-term target potentially reaching 10 gigawatts by the end of 2027.

Hardware would represent most of the investment required to reach those goals. One outside estimate cited by MarketWatch suggested that developing 10 gigawatts of computing capacity could cost as much as $336 billion, with Nvidia systems accounting for the majority of the total.

The $40 billion financing may therefore represent only one stage of a much larger capital-spending program.

SpaceX Credit Risk Climbs to a Record High

Bond investors reacted more negatively than equity investors to the financing plan.

SpaceX’s five-year credit-default-swap spread increased to a record 194 basis points, up from approximately 110 basis points when the contracts began trading in June.

At 194 basis points, it costs roughly $19,400 annually to insure $1 million of SpaceX debt against default. A wider CDS spread indicates that investors are demanding more compensation to accept the company’s credit risk.

SpaceX bonds also weakened. The spread between the company’s 2056 bond yield and comparable US Treasury yields increased to approximately 2.36 percentage points, compared with around 1.75 percentage points in June.

The reaction does not mean investors expect SpaceX to default. The company maintains an investment-grade credit rating and has substantial cash and growing revenue.

Instead, the movement shows that creditors are becoming less comfortable with the speed at which SpaceX is adding capital-intensive projects to its existing rocket, satellite and communications businesses.

Another Major Debt Deal After June’s $25 Billion Bond Sale

SpaceX already completed a $25 billion bond offering in June, shortly after raising approximately $86 billion through its initial public offering.

The inaugural bond transaction was increased from an original target of $20 billion after attracting almost $89 billion in investor orders. It included several maturities, with interest rates ranging from 5.35% for notes due in 2031 to 6.65% for the longest-dated debt.

The June proceeds were primarily intended to repay an existing bridge-loan facility, cover transaction costs and support general corporate purposes. SpaceX confirmed that the notes were unsecured obligations ranking equally with its other unsubordinated debt.

S&P Global assigned the bonds a BBB rating with a stable outlook. The agency expected adjusted leverage to remain below two times earnings, but it also warned that aggressive investment would produce significantly negative free cash flow.

The proposed $40 billion package would therefore arrive only months after SpaceX’s first major entry into public debt markets. Although part of the earlier bond sale refinanced existing borrowing, the rapid return for additional financing is contributing to concerns about long-term capital requirements.

Nvidia Emerges as a Major Beneficiary

For Nvidia, a SpaceX order of this size would reinforce the argument that demand for advanced AI accelerators remains supply constrained.

SpaceX has committed to building its AI infrastructure around Nvidia technology, making it both an important customer and a strategic partner. Nvidia is also a SpaceX shareholder following its earlier investment in xAI, which was subsequently combined with SpaceX.

The financing arrangement could generate several benefits for Nvidia:

• Greater visibility into future Vera Rubin orders;
• Deeper involvement in orbital and terrestrial data centers;
• Stronger demand for networking equipment and complete AI systems;
• Additional evidence that customers are willing to finance large purchases.

However, supplier-backed financing and debt-funded chip purchases introduce new risks. If customers cannot produce sufficient revenue from their AI infrastructure, they may reduce future orders or attempt to renegotiate commitments.

Nvidia’s growth could consequently become more exposed to the financial condition of its largest buyers, rather than depending only on demand for its technology.

Is the AI Boom Becoming a Debt Boom?

SpaceX is not alone in turning to capital markets to finance AI development.

Alphabet, Amazon, Meta, Oracle and several data-center operators have issued debt or entered private-credit arrangements to pay for processors, servers, electricity and construction. Nvidia has also raised capital and worked with financial institutions on structures designed to help customers purchase its systems.

More than $300 billion of debt linked to AI and data-center projects had reportedly been issued during 2026 by June. JPMorgan estimates that total AI infrastructure investment could reach $5.5 trillion by 2030, with approximately $4.1 trillion potentially financed through debt.

Borrowing is not necessarily a negative signal. Long-lived infrastructure is frequently financed with debt, particularly when it can produce predictable future revenue.

The concern is that AI processors depreciate more quickly than conventional infrastructure. A data-center building may operate for decades, while an advanced GPU could be surpassed by a newer generation within several years.

Companies must therefore generate returns quickly enough to cover interest costs before their hardware loses economic value.

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What the Financing Means for SpaceX Stock

The proposed transaction presents investors with sharply different scenarios.

In the bullish case, SpaceX uses Nvidia’s systems to establish a major AI-computing business alongside Starlink, Starshield and launch services. Rapid revenue growth could make the additional borrowing manageable, while AI and cloud services could diversify the company beyond capital-intensive space operations.

SpaceX has previously said it aims to reach a $100 billion annualized revenue run rate by the end of 2026, although investors will need to distinguish between annualized targets, contracted revenue and audited annual sales.

In the bearish case, infrastructure costs rise faster than revenue. Higher interest expenses, processor depreciation and continued spending on Starship, Starlink and data centers could keep free cash flow negative for longer than expected.

The most important factors to monitor will include:

• The final interest rate and maturity of the new debt;
• Whether the chips or other assets will secure the loans;
• SpaceX’s updated capital-expenditure forecast;
• Revenue generated by its AI and cloud-computing operations;
• Changes to its investment-grade credit ratings;
• The pace at which Nvidia systems are installed and monetized.

SpaceX’s $40 billion Nvidia financing plan demonstrates that demand for AI infrastructure remains exceptionally strong. It also highlights a transition in the AI investment cycle: companies are moving beyond spending operating cash and increasingly relying on bondholders, banks and private-credit investors.

Whether the strategy succeeds will depend on SpaceX’s ability to convert massive computing capacity into recurring revenue before debt costs and technological depreciation begin to outweigh the benefits.