SpaceX's $40B Nvidia chip debt deal nears close at interest rates of up to 8.3%

What's the deal? SpaceXDealroom has a profile for this one. Try Dealroom → is in talks to raise $40 billion in debt to buy Nvidia AI chips, according to reports from the Financial Times and Bloomberg. Apollo Global ManagementDealroom has a profile for this one. Try Dealroom → is expected to lead the deal, with bond giant PIMCO among the lenders in discussions to take part. None of the companies involved has publicly confirmed the plan.

Update, 22 October: The deal is now being finalised at sharply higher borrowing costs, Semafor reported. In the package led by ApolloDealroom has a profile for this one. Try Dealroom → and Goldman SachsDealroom has a profile for this one. Try Dealroom →, the lowest-rated portion is expected to carry an interest rate of about 8.3%, while a safer piece backed by some of SpaceX's chips is likely to price around 7.75% next week, more than one percentage point above where SpaceX's existing bonds trade. Semafor links the higher cost to an AI-loan market that has pulled back sharply in recent weeks, including CoreWeave's debt sell-off; SpaceX's existing bonds have weakened and its default insurance has widened despite strong earnings. Pricing could still change before completion, expected next week, and Goldman and Apollo declined to comment. For comparison, SpaceX sold $25 billion of bonds two weeks after its June IPO, CNBC reported. Investor Chamath Palihapitiya called the new paper "money good and better than most sovereign debt" and predicted that, apart from investment-grade hyperscalers, most borrowers will price at 10–12% in 2027.

How it's structured: The package would combine about $10 billion in bank loans with $30 billion in investment-grade debt, the FT reported — debt sold to investors who see the borrower as relatively safe. Apollo would sell the debt on to a wide range of investors.

What's the endgame? The chips would feed SpaceX's AI data centres. In August, Elon Musk said the company would build them using only Nvidia hardware, and last month he added that its Colossus 2 site could more than double its Nvidia chip count by December.

Why now? SpaceX also earns money by renting out that hardware. GoogleDealroom has a profile for this one. Try Dealroom → agreed to pay it $920 million a month for access to about 110,000 Nvidia GPUs, the chips used to train and run AI models.

What could go wrong? The two reports differ on how close a deal is. The FT's sources expect completion in 2027, while Bloomberg described the talks as early-stage and said they could still end without a deal. On the news, SpaceX shares fell about 1% in after-hours trading on Tuesday; Nvidia rose about 0.5%.

The signal: At $40 billion, this would rank among the largest debt financings tied to the AI buildout — and the biggest ever for a US space company. It fits a wider pattern: in August, Nvidia set up financing platforms with Apollo, BlackRock, Blackstone, BrookfieldDealroom has a profile for this one. Try Dealroom →, Goldman SachsDealroom has a profile for this one. Try Dealroom →, and KKR to raise more than $500 billion for AI infrastructure, increasingly helping customers pay for its own products.

Read more: Semafor, CNBC, Chamath Palihapitiya on X, thenextweb.com, Bloomberg

Image credit: jurvetson