SpaceX is reportedly seeking $40 billion in financing to purchase Nvidia AI chips, highlighting the enormous cost of building the computing infrastructure needed to compete in the rapidly expanding AI market.
According to Reuters, the Elon Musk-led company is discussing roughly $10 billion in bank loans and $30 billion in investment-grade debt. Apollo Global Management is expected to lead the financing, with PIMCO among the investors involved in discussions. The deal is still being negotiated and could change or fall through.
SpaceX Expands Beyond Rockets
SpaceX is increasingly positioning itself as more than a rocket and satellite company. Its AI ambitions include expanding data-center capacity used for large-scale computing, while Musk's xAI operations are also rapidly increasing their use of Nvidia hardware.
Musk has said the Colossus 2 data center could more than double its Nvidia chip capacity by December, underscoring the company's aggressive push to expand computing power.
The Cost of the AI Race
The proposed financing reflects a much larger trend across the technology industry. Companies are borrowing billions to secure advanced chips, build data centers and expand the computing capacity needed for increasingly powerful AI systems.
Morgan Stanley estimates that the AI infrastructure industry could require $1.5 trillion in external financing by 2028.
For SpaceX, the strategy could provide the computing power needed to expand its AI business without issuing additional shares. But taking on significant new debt also increases financial risk if AI revenues fail to grow quickly enough.
The bigger picture is clear: the AI race is no longer just a technology competition. It is becoming one of the largest capital investment races in the world.
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