New turn in SpaceX chip debt financing: the $40 billion is closed

Bloomberg reported that SpaceX was in talks with banks and investors to get $40 billion for Nvidia chips. The plan was to use a special company that keeps the debt off the SpaceX balance sheet.

On Sunday, Elon Musk said in a post that SpaceX closed $40 billion in debt financing to get GPUs. GPUs, or graphics processing units, are chips for AI systems. Musk said SpaceX is investment grade and has revenue from Starlink satellite internet and rocket launches. SpaceX reports AI unit revenue of $7.56 billion for the third quarter.

How it works

Musk said the financing is debt for GPUs. Bloomberg reported that Goldman Sachs led talks with investors, which include Apollo Global Management. Its sources were persons it did not name.

The numbers

SpaceX calls its AI unit Super Intelligence. The $7.56 billion is 9 times the $813 million of one year before. No rate is given.

What Musk expects

Musk said debt markets give a small quantity of money to firms with no other large revenue. Musk says that more than 200 neoclouds, firms that rent cloud services made for AI, will fail or merge. A small number will survive. This is the view of Musk.

Insight: Other income may decide who gets AI debt

Musk says lenders give a small quantity to firms with no revenue other than AI data centers. SpaceX has such revenue. Starlink had $5.25 billion of connectivity revenue in the quarter. This possibly helps SpaceX: debt goes to firms with other income, not to the neoclouds that Musk expects to fail. Monitor if the money arrives in 2027 as Musk says.