Musk says SpaceX has lined up $40bn of borrowing for AI chips
· BehindLines newsroom
Elon Musk wrote on X on Sunday, October 25, that SpaceX has finalised a $40 billion borrowing package to pay for graphics processors used in artificial intelligence. According to the Reuters report carried by The Star, he credited the company's strong credit rating and the income it earns from Starlink and from rocket launches.
In the post quoted by Reuters, Musk described the money mainly as debt that can be repaid early, tied to chip deliveries expected in the first and second quarters, with little effect on the current quarter. What "closed" means in practice is unclear. Bloomberg, citing people familiar with the matter, reported that negotiations over pricing were still going on. CNBC reported the same announcement; the names of the lenders, the interest rate and the maturity have not been made public.
Reuters had reported earlier that SpaceX was in talks with banks and asset managers to raise that sum for Nvidia chips. Musk himself did not name a supplier in his posts.
He also issued a warning to the wider industry. In his view, bond and loan markets have all but closed to companies that lack substantial revenue outside AI data centres. His target was the so-called neoclouds, firms that rent out GPU computing power, and he predicted mergers and failures among them. He added that SpaceX has no plan to buy any of them.
Why it matters: the announcement shows how expensive the race for computing capacity has become. Building AI capacity means buying very costly chips long before they earn money, and those purchases are often paid for with borrowed funds. A company backed by steady income, such as a satellite internet service, can raise debt more easily than a business that depends entirely on renting out GPUs.
For lenders, the challenge is judging what those chips are worth as collateral when each generation ages quickly. For neocloud customers, often model developers and start-ups, a wave of consolidation could change prices and the amount of computing on offer. Until the terms are published, the deal is known mostly through the statements of the man who announced it, without detailed confirmation from the banks involved.