SpaceX locks in $40B GPU financing deal with Apollo

SpaceX has reached a binding committedness for astir $40 cardinal successful financing for AI chips and related information halfway equipment, the company disclosed successful a regulatory filing Monday. SpaceX called the woody the “largest committed GPU financing” in a statement.

Under the agreement, an entity managed by Apollo Global Management, the New York-based backstage equity giant, volition bargain the chips and related server hardware, past lease the instrumentality to SpaceX. The leases volition past astir 5 to five-and-a-quarter years, opening erstwhile each tranche of instrumentality is delivered, according to the filing.

SpaceX expects the woody to adjacent by year-end, taxable to closing conditions, with leases starting successful the archetypal fractional of 2027 arsenic the GPUs and related instrumentality arrive.

The financing gives SpaceX different mode to money its rapidly expanding AI ambitions without relying solely connected accepted indebtedness markets.

“This lease diversifies our backing sources and addresses a notable information of the backing required to present connected our maturation plans,” SpaceX CFO Bret Johnsen said successful a connection Monday, noting it is seeing “less than one-year payback periods” connected its AI infrastructure investments arsenic it scales compute to powerfulness Grok and its unreality services.

Apollo said the financing volition assistance present Nvidia’s next-generation Vera Rubin chips for SpaceX’s “terrestrial compute buildout.”

The financing comes arsenic SpaceX ramps spending to grow its AI infrastructure, alongside its Starlink and motorboat businesses.

The financing follows a blockbuster 3rd 4th for SpaceX’s AI business. SpaceX’s AI segment, which includes the Grok chatbot, the Cursor coding instrumentality and its unreality compute business, outperformed capitalist expectations in the 3rd 4th and brought in $7.6 billion of SpaceX’s $14.6 cardinal successful revenue, much than Starlink and rocket launches combined.

Capital expenditures besides surged to astir $20 billion, up from $6.9 cardinal a twelvemonth earlier, arsenic SpaceX races to grow its compute footprint. CFO Bret Johnsen said connected the company’s Oct. 20 net call that SpaceX expects to walk $35 cardinal to $40 cardinal successful the 4th fourth alone.

The monolithic lease comes aft a tumultuous stretch successful the indebtedness markets for AI infrastructure players, arsenic investors turn squeamish implicit runaway superior expenditures and constricted profits.

While SpaceX had nary occupation tapping Wall Street, Musk utilized the $40 cardinal announcement to instrumentality a triumph thigh implicit pure-play AI compute rivals.

Pointing to SpaceX’s “investment-grade” presumption and dependable currency travel from Starlink and rocket launches, Musk argued connected Sunday that indebtedness markets person mostly closed the doorway connected companies without large gross streams extracurricular of AI information centers — spelling occupation for the much than 200 neocloud companies built solely to rent retired GPUs for AI workloads.