SpaceX plans to raise $40B to buy Nvidia chips, FT reports

US aerospace company SpaceX seeks to raise $40 billion in a financing effort led by Apollo Global Management to purchase Nvidia chips.

The company looked to raise about $10 billion in bank loans and $30 billion in investment-grade debt to fund the massive chip order, the Financial Times reported on Wednesday.

Private capital group Apollo expected to lead the deal and help sell the debt to a broad base of investors.

Bond group Pimco participated in talks among a small group of lenders to fund the transaction, which companies plan to close in 2027.

The financing plans underscored the massive sums that tech firms raised to pay for data centers, chips and other infrastructure underpinning artificial intelligence (AI).

Insurance and pension funds gained the opportunity to buy the debt of SpaceX due to its BBB credit rating, which marks the second-lowest investment-grade ranking.

Apollo and Pimco declined to comment on the matter, while SpaceX and Nvidia did not immediately respond to media inquiries.

The deal strengthened ties between SpaceX and Nvidia after SpaceX Chief Executive Officer Elon Musk vowed to double down on the technology of the group for his AI initiatives.

Musk said during the earnings call of SpaceX in August that his company decided to build exclusively on Nvidia because they considered the Vera Rubin architecture as the best architecture.