Elon Musk stated that SpaceX has completed a $40 billion debt deal to procure chips, supporting its artificial intelligence (AI) strategy.
In a post on X, Musk wrote that, thanks to SpaceX's investment-grade credit rating and revenue from its Starlink satellite business and rocket launches, the company ultimately secured this debt financing to pay for NVIDIA's graphics processing units (GPUs).
While emphasizing the diversification of SpaceX's business, Musk sought to distance the company from so‑called "neoclouds"—providers that sell high‑end computing power to tech firms. Over the past two weeks, these cloud‑computing players have come under intense market scrutiny, weighed down by heavy debt and uncertain demand prospects.
"Over the past few weeks, the debt markets have virtually shut off all avenues of financing for companies that cannot decouple from AI data centers and generate independent, stable revenue streams," Musk wrote in a post. "More than 200 new cloud‑service providers are poised for large‑scale liquidation and consolidation, with only a handful likely to survive." He went on to say that SpaceX will not acquire any new cloud‑service firms, calling such an move "completely pointless."
From the post Musk published last Sunday, it remains unclear what exactly he means by the deal being "closed," nor is it clear whether investors have yet reached an agreement on debt pricing.
SpaceX is not entirely immune to growing concerns about the escalating AI infrastructure boom. According to reports last Friday, discussions over the final pricing of its $40 billion chip‑financing off‑balance‑sheet structure have stalled amid the latest market turbulence in the cloud sector.
Sources familiar with the matter said that bankers led by Goldman Sachs have been discussing the structure with investors headed by Apollo Global Management, while Atlas SP, backed by Apollo, plans to manage this vehicle. The sources, who asked not to be identified because they were discussing private information, also indicated that Pacific Investment Management Company (PIMCO) had considered investing as well. According to the sources, the debt is expected to be issued in a private placement under Rule 144A.
With its latest restructuring, SpaceX will avoid repeating the missteps of Elon Musk's AI startup xAI's fundraising effort last year. In that deal, an entity sought to raise up to $20 billion in off‑balance‑sheet debt through a sale-and-leaseback arrangement with Valor Equity Partners. However, according to SpaceX's most recent financial report, after the arrangement was classified as a "sale‑and‑leaseback that does not meet the criteria for sale," SpaceX ultimately had to recognize approximately $13 billion of that debt on its balance sheet.
Prior to this debt financing, SpaceX had just reported a strong third-quarter earnings report, with its AI division posting its first-ever profit. The business is increasingly driving revenue growth by leasing the computing power of its Memphis data center to external AI labs and hyperscale cloud service providers.
During SpaceX's earnings call, Chief Financial Officer Brett Johnson stated that the company is in discussions with its lenders about additional financing.
"We are very confident that we can achieve this in a highly disciplined manner while continuing to maintain our investment-grade rating," he said, noting the company's investment-grade credit rating.