SpaceX, led by Elon Musk, is reportedly seeking to raise $40 billion to purchase NVIDIA chips.
The Financial Times (FT) reported on October 6, citing sources, that Apollo Global Management, a private equity firm, is expected to lead the funding round. PIMCO, the world's largest bond manager, is also said to be participating in the investment.
Of the total $40 billion, $10 billion will be raised through bank loans, while the remaining $30 billion will come from issuing corporate bonds. SpaceX has a credit rating of BBB, which is the second-lowest investment-grade rating. This means that insurance companies and pension funds, which have strict investment restrictions, can also invest.
FT anticipates that this funding will further strengthen the relationship between SpaceX and NVIDIA. In August, Musk highlighted this connection during a SpaceX earnings call, stating, "I believe NVIDIA's Vera Rubin architecture is the best, so we decided to use only NVIDIA products."
However, market sentiment is not entirely positive. In June, shortly after an $86 billion initial public offering (IPO), SpaceX issued $25 billion in corporate bonds within two weeks. Concerns over rising debt and significant capital expenditures led to a sharp decline in bond prices shortly thereafter. According to FT, the yield spread between SpaceX bonds and U.S. Treasuries is approximately 2.27 percentage points, indicating that SpaceX bonds are treated similarly to speculative-grade bonds in the market.
The lack of transparency in SpaceX's financial information is also cited as a factor making investors hesitant. Past investors who were approached for funding semiconductor purchases reported receiving only a brief two-page contract indicating plans to build a data center somewhere in space.
Apollo and PIMCO declined to comment on the report, while SpaceX and NVIDIA did not respond.
* This article has been translated by AI.
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