SpaceX to raise $40b in debt to fund Nvidia chip purchases

SpaceX is seeking to raise $40 billion through loans and corporate bond issuances to fund purchases of advanced Nvidia chips.

The Financial Times reported Tuesday (local time), citing sources, that private equity firm Apollo Global Management is leading the fundraising effort.

SpaceX plans to secure around $10 billion in bank loans and raise $30 billion through corporate bond issuances, with Apollo expected to sell the bonds to investors. Pimco, the world's largest bond manager, is also among a small group of creditors involved, sources said. The fundraising is expected to be completed next year.

SpaceX holds a BBB credit rating, the second-lowest investment-grade designation, meaning insurance companies and pension funds are eligible to purchase its corporate bonds.

SpaceX CEO Elon Musk announced the Nvidia chip purchase plan at an earnings call in August, saying the company had decided to fully adopt Nvidia's cutting-edge AI platform, Vera Rubin, which it considered the best architecture available. "We think it's the best AI computer, and we very much value our close collaboration and partnership with Nvidia," he said at the time.

SpaceX had already issued $25 billion in corporate bonds shortly after its initial public offering in June. Concerns over rising debt and heavy capital expenditure have since weighed on bond prices, pushing the yield spread to around 2.27 percentage points above US government bonds — a level comparable to junk bonds.