SpaceX has secured a conditional equipment financing commitment worth about $40bn, while chief executive Elon Musk has predicted that many specialist artificial intelligence cloud providers will fail.
The agreement, disclosed by Apollo Global Management on 26 October, would finance computing hardware for SpaceX, with deliveries expected during the first and second quarters of 2027. Completion is expected before the end of the year, subject to specified conditions.
Under the proposed arrangement, an entity managed by Apollo would buy graphics processing units (GPUs) and associated equipment, which SpaceX would then lease. The master finance lease would set the terms for separate batches of equipment and involve expected aggregate principal payments of approximately $40bn.
Musk had discussed the company’s access to borrowing on X the previous day, linking it to SpaceX’s investment-grade credit rating. That rating indicates a relatively low risk of default and has helped the company raise debt.
In a follow-up explanation of the GPU financing, Musk described the proposed borrowing as primarily callable debt, meaning it would generally allow repayment before maturity under specified conditions. He said the chip deliveries were expected in the first half of 2027 and would have little impact during the current quarter. Apollo’s disclosure, however, refers to a lease commitment whose completion is still pending.
Neoclouds are specialist providers that rent computing infrastructure built for artificial intelligence workloads. Musk said debt markets had largely limited funding for companies that lacked significant revenue beyond AI data centres.
His comments came after investor Chamath Palihapitiya raised concerns about construction delays and the possibility of unused computing capacity in 2027. Musk forecast that most neoclouds would fail.
Companies taking on debt must generate enough cash to cover repayments as well as their operating costs. Lenders assess that ability to pay, while creditors’ claims differ from the ownership interests held by shareholders. Musk presented SpaceX’s established businesses as a reason it could secure capital, rather than relying solely on anticipated demand for AI services.
Elsewhere, Stack Infrastructure was reportedly seeking a $6bn loan for a data centre in Melbourne earlier this month. That proposal remained a fundraising effort and represented a separate attempt to secure major financing for computing infrastructure.
SpaceX’s capital expenditure reached $19.6bn in the third quarter, according to its quarterly earnings presentation published on 20 October. Chief financial officer Bret Johnsen said fourth-quarter spending was expected to be between $35bn and $40bn as the company expands its computing capacity.
The company also increased its software interests through the $60bn acquisition of Cursor in August. Cursor is an AI coding platform that assists developers in writing and modifying software. SpaceX had previously partnered with the company to provide computing infrastructure for training AI models.
Longer-term plans include the Terafab semiconductor manufacturing project being developed with Tesla. Musk has targeted May or June 2027 for a functional test chip at a research facility in Austin, while production at the planned main site in Gibbons Creek, Grimes County, Texas, is targeted for the third or fourth quarter of 2028. He described that timetable as aggressive.
Musk also expects Tesla’s Optimus robot and Cybercab to account for most of the company’s future value.
