FT: SpaceX now wants $40bn for Nvidia chips. Its bonds already trade like junk.

Our partners at the Financial Times report this morning that Elon Musk's SpaceX is lining up $40bn to buy Nvidia chips: $10bn in bank loans and $30bn in investment-grade debt. Apollo is leading the deal, and Pimco is among the lenders in talks. SpaceX's BBB rating opens the door to pension and insurance money. Its existing bonds are less confident. Four months after an $86bn IPO, its 2056 bonds trade near 85 cents on the dollar, at spreads close to junk. One investor recalls a two-page pitch that promised data centres "somewhere in the universe". For JSE investors with offshore tech exposure, the question is simple: how long can debt keep funding the AI build-out before lenders blink?.By Michelle Chan.Elon Musk’s SpaceX is seeking to raise $40bn in a financing effort led by Apollo Global Management to purchase Nvidia chips as the AI and rocket group amplifies its bet on the chipmaker’s advanced technology.The company is seeking to raise about $10bn in bank loans and $30bn in investment-grade debt to fund its blockbuster chip order, according to people familiar with the matter.Private capital group Apollo is expected to lead the deal and help sell the debt to a broad base of investors. Bond group Pimco was among a small group of lenders in talks to fund the deal, the people said. The transaction is expected to close in 2027. SpaceX’s financing plans underscore the vast sums that are being raised to pay for investments in data centres, chips and other infrastructure underpinning AI.Insurance and pension funds would be able to buy SpaceX’s debt due to its BBB credit rating, the second-lowest investment-grade ranking. Such funds take much more limited positions in junk-rated notes.Apollo and Pimco declined to comment. SpaceX and Nvidia did not immediately respond to requests for comment. The deal would strengthen ties between SpaceX and Nvidia, after Musk vowed to double down on the group’s technology for his AI initiatives. It would also mark a win for Nvidia, as it contends with growing competition from chipmakers aiming to challenge its dominance in advanced semiconductors. “We’ve decided to build exclusively on Nvidia because we think the Vera Rubin architecture is the best architecture,” Musk said during SpaceX’s earnings call in August, referring to Nvidia’s cutting-edge AI platform.“We think it’s the best AI computer, and we greatly value our close co-operation and partnership on many levels with Nvidia.”SpaceX secured an investment-grade rating shortly after its $86bn initial public offering in June. It sold $25bn in high-grade bonds less than two weeks later. However, the bonds sold off in the following days due to concerns over its mounting debt and heavy capital expenditure.Its bonds maturing in 2056 are trading at about 85 cents on the dollar, with a yield at about 2.27 percentage points above US Treasuries, similar to the level of junk bonds, according to MarketAxess data.Musk’s limited financial disclosures have kept some investors away from SpaceX debt in the past.Investors who SpaceX has previously approached about financing its multibillion-dollar chip purchase said they only received a short two-page deal memo with pictures of outer space and an arrow pointing out that the company was going to build data centres “somewhere in the universe”. “How are we supposed to take that to the IC?” one of the people said, referring to the in-house investment committee that approves transactions. Apollo has made lending to high-grade companies a pillar of its $800bn credit business, leading multibillion-dollar financing transactions for groups such as Intel and Bayer. Its life insurance and annuities affiliate Athene typically buys are a large portion of these offerings.Apollo also led a $35bn chip financing deal in June for processors made by Nvidia rival Broadcom, marking the largest private credit transaction at the time.In August, Nvidia announced that it was working with some of the largest firms on Wall Street on a $500bn funding platform, signing memorandums of understanding with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR..Read more:.The Economist: DeepSeek disrupts Nvidia, competition heats up in AI chip war.The consortium aims to create pools of third-party capital to finance the acquisition of Nvidia’s chips and broader build-out of AI infrastructure at lower borrowing costs for its smaller clients, with Nvidia potentially backstopping up to 25 per cent of the chip value..© 2026 The Financial Times Ltd..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here.

FT: SpaceX now wants $40bn for Nvidia chips. Its bonds already trade like junk.

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