SpaceX seeks $40 billion for Nvidia chips; Nvidia holds a $21B stake

CEO Jensen Huang isn't hedging about where this goes. "Now, compute is revenue," he said with those results. Nvidia expects about $108 billion in sales this quarter, and it also said its next platform, Vera Rubin, is ramping into full production. (We've also covered AMD's Lisa Su saying AI chip demand still beats supply into 2027.)

Why is SpaceX the reason it's in the news?

According to the reports, SpaceX wants $10 billion in bank loans and $30 billion in investment-grade debt (bonds sold to big, cautious buyers such as pension funds) to pay for Nvidia AI chips. Apollo Global Management (APO) is expected to lead the deal and sell the debt to investors, and bond giant Pimco is in talks to lend. SpaceX and Nvidia didn't respond to Reuters, and Apollo and Pimco declined to comment.

The chips are for AI, not rockets. SpaceX took over Musk's AI company xAI in February. Musk posted on X last month that xAI's Colossus 2 data center could more than double its count of Nvidia chips by December. On SpaceX's first earnings call in August, he said the company would build its AI systems only on Nvidia hardware: "So we're exclusive to Nvidia". On the same call, he said it expects "a significant allocation" of Vera Rubin chips in 2027. If you want the rocket side of the company, read our Starship explainer.

How Nvidia is tied to SpaceX

The money goes around in a circle. Nvidia isn't only the seller here. Its ties to SpaceX run in several directions:

Nvidia's role	What it means
Chip supplier	SpaceX says it will build on Nvidia hardware only
Shareholder	122.8 million SpaceX shares, worth about $21 billion at the end of June
Anchor investor	In a Valor fund that leased GB200 GPUs to xAI, backed by $3.5 billion from Apollo
Financing partner	Signed preliminary agreements with Apollo and five other firms in August on platforms meant to raise $500 billion or more for AI

Nvidia didn't buy those shares on the open market. It put $10 billion into xAI in January, and the stake became SpaceX stock when the merger closed. Apollo has done this kind of deal before: in January it backed a $5.4 billion purchase of computing gear, including Nvidia chips, that was then leased to an xAI subsidiary to train Grok.

None of that makes the deal shady. It does mean Nvidia gains several ways if SpaceX's AI bet works, and gets hit several ways if it doesn't. Morgan Stanley estimates that AI infrastructure will need $1.5 trillion in outside financing by 2028, Reuters reported, so expect a lot more borrowing like this.

Investors barely reacted. SpaceX shares fell 1% to 2% after the report, and Nvidia rose 0.5%.

What's still unknown, and what's next?

The reports don't say which chips SpaceX is buying or how many, which banks will join the group or what interest rate it will pay. None of the companies has confirmed a thing. Watch for a formal bond offering from SpaceX and for Nvidia's next earnings report, which should show whether one customer with this much borrowed money is starting to move its numbers.

This isn't the first time Musk's AI side has leaned on someone else's money to get chips. In the Valor deal, Apollo put up the cash, the gear was bought, and xAI rented it rather than owning it outright. This time the borrower is SpaceX itself, so the cost of the AI race would sit on the books of a rocket company.

That's the bet underneath all this. Musk is acting as if whoever gets the most computing power first wins, and Huang makes the same argument from the other side of the counter when he says compute is revenue. If they're right, the debt will look cheap in hindsight. If demand cools, lenders will start asking what those chips are worth secondhand.

The WattsUpNext take: Nvidia sells SpaceX the chips, owns SpaceX stock and works with SpaceX's lender. That piles a lot of exposure onto one customer: if SpaceX's AI spending slows or the debt gets harder to carry, Nvidia would feel it as a supplier, a shareholder and a financing partner at the same time.