Apollo, banks in talks to finance SpaceX's $40 billion Nvidia GPU purchase
Since SpaceX's record-breaking IPO in June, rates have sold off, and yields on its bonds have risen, along with other AI-related bonds.
TL;DR
- SpaceX is in talks with Apollo Capital Management and banks for a $40 billion Nvidia GPU purchase.
- The deal is expected to rely on investment-grade debt, with GPUs potentially used as collateral.
- SpaceX previously raised $25 billion in bonds after its IPO, which saw high demand.
- AI-related bonds have recently sold off, and credit spreads have widened.
- The value of high-performing GPUs is supported by scarce computing power and a shortage expected to persist.
- SpaceX is already using a significant number of Nvidia AI chips and plans to substantially increase this number.
- SpaceX reported nearly $40 billion in debt in its second-quarter financials, with existing debt trading near junk bond levels.
- The company has secured compute deals with Google, Anthropic, Reflection AI, and Cursor.