Elon Musk-led SpaceX is in reported talks with banks and asset managers to raise USD 40 billion for the purchase of Nvidia AI chips, with PIMCO being brought onboard for financing.
SpaceX is looking to raise about USD 10 billion in bank loans and USD 30 billion in investment-grade debt for the chip order.
American asset management firm Apollo Global is expected to lead the SpaceX deal and help place the debt with a broad range of investors, reported the Financial Times.
The news comes amid the ongoing AI boom, a phenomenon that has also forced the companies to shell out enormous capital to secure advanced processors to build out the computing infrastructure needed to support the technology’s development.
As per Morgan Stanley’s estimates, AI infrastructure-related projects will require USD 1.5 trillion in external financing by 2028.
However, lenders and investors are becoming more cautious about funding the industry’s expansion amid the ongoing safety talks around the technology.
Musk, who took SpaceX public in June in a record USD 86 billion IPO, said last month that xAI’s Colossus 2 data center could more than double the number of Nvidia chips it uses by December.
“The company plans to use Nvidia hardware exclusively to build its data centers,” Musk said back then.
Nvidia, the dominant supplier of AI processors, in August partnered with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs, and KKR on financing platforms intended to mobilize more than USD 500 billion for AI infrastructure projects.
Musk is also heavily investing in the Terrafab project, a planned, massive semiconductor manufacturing complex jointly developed by Tesla, SpaceX, xAI, and Intel, which he believes will eliminate supply chain bottlenecks and power next-generation AI projects.
His companies will build and run the Terafab AI chip complex, with TSMC possibly subleasing a part of it.
Replying to a post on the popular microblogging platform X, which said the most likely outcome was TSMC owning and running the fab, Musk wrote, “No, we will build and run the fab. Let there be ZERO doubt about that.”
“Maybe TSMC subleases part of the Terafab if they want, but nothing more than that,” he added.
Intel CEO Lip-Bu Tan, through his latest interaction with Bloomberg News, has made it clear that the American chipmaker will remain involved with the project.