Musk said SpaceX closed $40 billion in debt financing for AI chips

SpaceX CEO Elon Musk said in a post on X $TWTR on Sunday that SpaceX had wrapped up a $40 billion borrowing deal to fund purchases of graphics chips known as GPUs. He pointed to SpaceX's investment-grade rating, along with income from Starlink internet service and rocket launches.

It was unclear right away how Musk was using the word "closed," or whether buyers of the debt had signed off on its pricing, according to Reuters.

In a follow-up post, Musk said the financing mostly takes the form of debt the company can redeem early, earmarked for GPUs due to be delivered over the first two quarters, according to Reuters. He called it "not a major factor this quarter." SpaceX anticipates spending between $35 billion and $40 billion on capital projects in the fourth quarter, Chief Financial Officer Bret Johnsen said.

Musk also wrote that over the past few weeks, debt markets have nearly cut off funding to any firm lacking sizable revenue outside AI data centers. He predicted that of the 200-plus neocloud companies, most will collapse or be absorbed by rivals, leaving only a handful standing. Musk later ruled out acquiring any neocloud companies, dismissing the idea as "pointless," according to Reuters.

Neoclouds like Nebius and CoreWeave cater chiefly to technology companies, selling computing capacity designed around AI workloads, according to Reuters. Investors have begun wagering on declines in U.S. data center and neocloud firms, Reuters said, as concerns that borrowed money was funding unsustainable expansion triggered a selloff.

Reuters reported earlier this month that SpaceX was negotiating with banks and asset managers over a $40 billion raise to purchase Nvidia $NVDA chips.

SpaceX's AI business generated $7.56 billion in revenue in the three months ended Sept. 30, up from $813 million a year earlier. Total revenue rose 161% from a year earlier to $14.58 billion.

SpaceX has tapped debt markets before. In June, it raised $25 billion in its debut bond offering, less than two weeks after completing its initial public offering. The investment-grade sale drew nearly $90 billion in orders, and its 10-year tranche priced about half a percentage point wider than comparable Intel $INTC notes.

SpaceX said at the time that it would use the proceeds to repay its bridge loan facility in full, with any remainder going to general corporate purposes.