SpaceX is seeking about $40 billion of financing led by Apollo Global Management to buy Nvidia AI chips, Reuters reported Tuesday, citing the Financial Times. The companies did not confirm the report, and the deal is not expected to close until 2027.

What Happened

According to the FT report relayed by Reuters, the package would combine roughly $10 billion of bank loans with about $30 billion of investment-grade debt. Apollo is expected to lead the transaction and help place the debt with a broad range of investors. Bond manager Pimco is among a small group of lenders in talks to take part.

SpaceX, Apollo and Nvidia did not immediately respond to Reuters' requests for comment, and Pimco declined to comment. SpaceX shares fell about 1% in extended trading after the report, while Nvidia rose about 0.5%.

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The chips are intended for Elon Musk's AI data center buildout. Musk said last month that xAI's Colossus 2 data center could more than double the number of Nvidia chips it uses by December, and the company plans to use Nvidia hardware exclusively for its data centers, Reuters said.

Why It Matters

A $40 billion package dedicated to chip purchases would be one of the clearest signs yet that debt, not just equity, is paying for the AI hardware race. Structuring most of it as investment-grade debt would allow the borrowing to be sold to insurers, pension funds and bond managers that typically buy highly rated paper, rather than relying only on banks or private credit.

Reuters cited a Morgan Stanley estimate that AI infrastructure will need $1.5 trillion of external financing by 2028. Deals of this size are one way that gap is being filled, and asset managers such as Apollo have positioned themselves as arrangers between AI companies and large pools of institutional capital.

For SpaceX, which went public in June in what Reuters called a record $86 billion IPO, the financing would let it fund a very large chip order without issuing more shares. Because the report did not say how many chips the money would buy or on what schedule, the scale of the order relative to Nvidia's output is not yet clear.

Context

Nvidia has been building its own channels to finance customers' purchases. In August, it partnered with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR on financing platforms meant to mobilize more than $500 billion for AI infrastructure projects, according to Reuters.

Similar structures are appearing elsewhere in the industry. Last week, Bloomberg reported that Broadcom had started raising $60 billion of debt, split into a $42 billion senior tranche and an $18 billion junior tranche led by Blackstone, to help Anthropic and other customers pay for chips and infrastructure.

What to Watch

Key details still to come include confirmation of the terms by SpaceX or Apollo, credit ratings on the investment-grade portion and which other lenders join Pimco. Investors will also look for disclosure of the size and delivery timing of the Nvidia order, and for how the borrowing fits with Musk's plans to keep expanding Colossus 2 ahead of the expected 2027 closing.