Musk Says SpaceX Completes $40 Billion GPU Debt Financing; Bloomberg Says Pricing Negotiations Still Underway

Musk announced that SpaceX has completed the largest AI chip financing in history, but according to reports, people familiar with the matter revealed that pricing negotiations are still ongoing, and the details of the deal remain uncertain.

On October 25 local time, well-known tech blogger Sawyer Merritt posted on X that Musk confirmed SpaceX has completed a new round of $40 billion in debt financing to fund GPU procurement and computing infrastructure construction.

Subsequently, Musk replied, "More or less." SpaceX has completed approximately $40 billion in debt financing, with the funds to be used to purchase Nvidia GPUs to support the expansion of its artificial intelligence business. He attributed the success of this financing to SpaceX's investment-grade credit rating and the diversified revenue sources provided by its Starlink satellite internet and rocket launch businesses. Musk also warned that the debt market "has closed its financing channels in recent weeks to almost all companies lacking revenue independent of AI data centers," and predicted that the neocloud industry will see massive consolidation and a wave of bankruptcies.

According to a Bloomberg report on October 26, people familiar with the matter revealed that as of Sunday, the parties to the transaction were still negotiating the final pricing, and the transaction had in fact not yet been formally completed. This differs from Musk's post stating that it had been "completed." Musk also said that the debt is mainly redeemable debt, and the relevant GPUs will arrive successively in the first and second quarters of next year, "this quarter is not a major factor." The financing terms, the specific GPU supplier, and the delivery arrangements were not disclosed.

It is worth noting that a Wall Street CN article previously wrote on October 8 that SpaceX was seeking to raise $40 billion to purchase Nvidia chips, and the news immediately hit the credit market—at that time, the transaction was still at the "seeking financing" stage. Musk's post this time is the latest confirmation of that process, but the claim that it has been "completed" is still questioned by people familiar with the matter.

Deal structure: off-balance-sheet arrangement, led by Goldman Sachs, with Apollo taking the lead

According to Bloomberg, people familiar with the matter revealed that this financing adopts an off-balance-sheet structure, with Goldman Sachs leading negotiations with investors, Apollo Global Management as the main investor, and its Atlas SP will be responsible for managing the financing entity. Pacific Investment Management Company (Pimco) also considered participating in the investment. The debt is expected to be issued in the form of a 144a private placement.

A Wall Street CN article previously wrote that the $40 billion financing plan consists of $10 billion in bank loans and $30 billion in investment-grade bonds, with Apollo expected to take the lead in participating and Pimco also in talks to join.

SpaceX chose an off-balance-sheet structure partly to avoid the lessons of previous financing. According to Bloomberg, Musk's AI startup xAI last year attempted to raise up to $20 billion in debt off-balance-sheet through a sale-leaseback agreement with Valor Equity Partners, but the arrangement was ultimately deemed a "failed sale-leaseback," and SpaceX had to put about $13 billion of it on its balance sheet, dealing a direct blow to its financial statements.

The backdrop to this financing is SpaceX's just-announced impressive third-quarter results. A Wall Street CN article mentioned that SpaceX's third-quarter revenue grew 161% year-on-year to $14.58 billion, of which AI business revenue surged nearly 10-fold to $7.56 billion and achieved profitability for the first time—this is the most direct proof that SpaceX's large-scale AI investment has begun to pay off.

SpaceX's AI business mainly drives revenue growth by selling computing power from its Memphis data center to external AI labs and hyperscale cloud computing providers, a model that is reshaping a company long centered on Starlink satellite internet as its core financial engine.

SpaceX Chief Financial Officer Bret Johnsen said on the earnings call that the company is in talks with lenders about further borrowing and emphasized:

"We are very confident that we can advance this process in a very prudent manner and continue to maintain our investment-grade rating in the process."

He also revealed that the company's fourth-quarter capital expenditure is expected to be between $35 billion and $40 billion.

Musk blasts neoclouds: the bond market has closed its doors to them

In addition, it is worth noting that Musk also used this financing announcement to issue a strong warning to the neocloud industry. He wrote in the post: "More than 200 neocloud companies will face bankruptcy and consolidation, some will survive, but not many." He later added that SpaceX will not acquire any neocloud companies, calling such a move "meaningless."

Neocloud companies (such as Nebius and CoreWeave) differ from large cloud service providers such as Alphabet and Amazon in that they mainly serve technology customers and provide computing services customized for AI. Over the past two weeks, the market has begun betting on weakness in U.S. neocloud and data center companies, worried that their debt-driven AI infrastructure expansion will be unsustainable, and related stocks have been sold off.

Musk's statement forms a sharp contrast with SpaceX's own financing logic: it is precisely because of the stable revenue provided by Starlink and rocket launch businesses that is independent of AI data centers that SpaceX has been able to keep its financing channels open as the credit market tightens.

According to Bloomberg, the final pricing negotiations for SpaceX's financing have been affected by the recent turmoil in the neocloud market. Bloomberg columnist Shuli Ren previously pointed out that at such a scale of issuance, "execution is everything"—if pricing is too aggressive, orders could evaporate overnight. She also believes that the AI credit boom party is still going on, and Musk may be testing the limits of the debt market, but not enough to break it.

Longer-term layout: self-developed chips and a Tesla merger on the agenda

Beyond GPU procurement, SpaceX's AI chip strategy also extends to self-manufacturing. According to Reuters, Terafab, a chip manufacturing joint venture established by SpaceX and Tesla in Austin, is expected to produce its first test chip between May and June next year and plans to achieve mass production in the third quarter of 2028.

Musk also said at an investor call last week that a merger between SpaceX and Tesla would be "a good idea," citing increasing business overlap between the two companies.

In its IPO prospectus (S-1), SpaceX has listed "self-manufacturing GPUs" as one of its major capital expenditure items and clearly alerted potential investors to its large-scale spending plans in AI and other technology fields. Risk disclosure and disclaimer

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