Musk Says SpaceX Closed $40 Billion GPU Debt Deal as AI Credit Market Tightens
Elon Musk said Sunday that SpaceX has closed $40 billion in debt financing to buy AI chips, while warning that lenders have all but shut out other artificial intelligence data center operators.
“SpaceX closed $40B of debt for GPUs, but we’re investment grade and have Starlink & launch revenue,” Musk wrote in a post on X.
In a follow-up post, he added: “This is primarily callable debt for GPU purchases that will arrive in Q1 and Q2. Not a major factor this quarter.” Musk did not disclose the interest rate, lenders or structure of the deal.
The financing had been in the works for weeks.
In early October, SpaceX was in talks with banks and asset managers to raise about $10 billion in bank loans and $30 billion in investment-grade debt to buy Nvidia chips, Reuters reported.
Last week, Bloomberg reported that the off-balance-sheet financing had run into rising borrowing costs as turmoil over AI debt spread through credit markets.
‘Debt Markets Have Almost Entirely Shut Off’
Musk framed SpaceX’s deal as an exception. “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,” he wrote.
“That means the 200+ neoclouds are going to see guppy-level death and consolidation. Some will make it through, but not many,” Musk added. Neoclouds are companies that rent out AI computing power.
The strain has been most visible at CoreWeave, the largest of the group. As of Oct. 21, its stock was down 36% for the month and its unsecured debt yielded about 15%, CNBC reported.
The cost of insuring CoreWeave’s debt against default had climbed to 1,145 basis points, a level generally viewed as distressed. “Sentiment is decidedly negative,” Barclays credit analyst Andrew Keches wrote of AI-related bonds.
Sources on credit desks told CNBC the high-yield debt market is effectively on hold until after the Nov. 3 midterm elections because of political pushback against data centers.
SpaceX’s own spending is accelerating. The company expects fourth-quarter capital expenditures of $35 billion to $40 billion, up from $19.6 billion in the third quarter, Yahoo Finance reported.
Chief Financial Officer Bret Johnsen defended the outlay on the earnings call. “At current pricing, new compute deployments are generating a payback of less than a year,” he said.
That math depends on rental prices holding. Musk said on the call that SpaceX rents its computing capacity at roughly spot-market rates rather than signing long-term contracts.
SpaceX reported third-quarter revenue of $14.6 billion, up 161% from a year earlier, with AI now accounting for more than half. Analysts expect the company to burn $61 billion in free cash flow this year.
The company went public in June in a record initial public offering. Musk’s comments came as investors await earnings this week from Microsoft, Alphabet and Amazon, with AI spending in focus.
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