A panel at “The Big Money Show” highlighted SpaceX’s 161% revenue growth and Elon Musk’s comments on a possible Tesla merger.
SpaceX has secured $40 billion in debt financing to acquire graphics processing units for its AI initiatives, underscoring the massive investment needed to expand AI computing power.
Musk announced the financing on Sunday, attributing the deal to SpaceX’s investment‑grade credit standing and its diversified revenue streams from Starlink internet services and launch operations.
“SpaceX closed $40 billion of debt for GPUs, but we’re investment grade and have Starlink and launch revenue,” Musk said.
GPUs are advanced chips that deliver the computing power required to train and run AI models.
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SpaceX closed $40 billion in debt financing to purchase advanced computer chips for its artificial intelligence operations. (Francis Chung/Politico/Bloomberg via Getty Images / Getty Images)
Reuters previously reported that SpaceX was negotiating with banks and asset managers to raise $40 billion to acquire Nvidia AI chips.
Musk later posted on X, “This is primarily callable debt for GPU purchases that will arrive in Q1 and Q2,” adding that the GPUs are slated to arrive in the first half of 2027 and “are not a major factor this quarter.”
The pricing terms of the debt have not yet been confirmed by investors.
The financing highlights the high cost of the AI race, with companies pouring money into advanced chips and computing infrastructure.
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SpaceX CEO Elon Musk announced a $40 billion financing deal on Sunday, emphasizing the company’s investment‑grade status and its revenue from Starlink and launch services, as shown in the image. (Fabrice Coffrini / AFP via Getty Images / Getty Images)
SpaceX Chief Financial Officer Bret Johnsen said the company expects to spend $35 billion to $40 billion on capital expenditures in the fourth quarter alone, according to Reuters.
Musk also said borrowing conditions have deteriorated significantly for companies that rely heavily on AI infrastructure.
Musk observed that “as of the past few weeks, debt markets have almost entirely shut off access to money for any company that doesn’t have substantial revenue independent of AI data centers.”
Musk warned that many of those companies could struggle to survive.
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Chief Technology Officer of X Elon Musk speaks at a conference on June 19, 2024 in Cannes, France. (Richard Bord/WireImage / Getty Images)
Musk commented, “That means the 200+ neoclouds are going to see guppy‑level death and consolidation,” noting that many AI‑focused cloud providers will likely fail, “but some will make it through, not many.”
SpaceX’s established businesses, including Starlink and rocket launches, provide revenue streams outside its AI operations.
SpaceX’s third‑quarter revenue climbed 161% from a year earlier to $14.58 billion, according to Reuters.
Musk suggested last week that a potential merger of Tesla and SpaceX would be “a good idea.”
He also said both companies have formed special committees of independent directors to explore a potential deal, though Musk stressed that a merger is not certain.
Reuters contributed to this report.