Elon Musk has announced that SpaceX has closed a $40 billion debt financing deal to fund purchases of graphics processing units (GPUs), highlighting the enormous cost of expanding artificial intelligence computing infrastructure.
Musk disclosed the development on Sunday, October 25, in a post on X, attributing the financing to SpaceX’s investment-grade status and revenue generated by its Starlink satellite internet and rocket launch businesses.
However, it was not immediately clear what Musk meant by saying the deal had been “closed” or whether investors had finalised the pricing for the debt.
“This is primarily callable debt for GPU purchases that will arrive in Q1 and Q2. Not a major factor this quarter,” Musk said in his post.
SpaceX expects to spend between $35 billion and $40 billion on capital expenditure in the fourth quarter, according to the company’s Chief Financial Officer, Bret Johnsen.
Earlier in October, reports indicated that SpaceX was in discussions with banks and asset managers to raise $40 billion to purchase artificial intelligence chips from Nvidia.
The financing underscores the massive investment required to support the global AI boom, as technology companies compete to secure advanced processors and build the computing infrastructure needed to develop and operate increasingly powerful AI systems.
Musk also warned that companies without substantial revenue outside AI data centres were finding it increasingly difficult to secure financing through debt markets.
“Have almost entirely shut off access to money for any company that doesn’t have substantial revenue independent of AI data centers,” Musk said of the debt markets.
He predicted that so-called neocloud companies, which specialise in providing computing capacity for AI applications, would face significant consolidation and business failures as funding became more difficult to obtain.
Musk later ruled out SpaceX acquiring any neocloud companies, describing such a move as “pointless.”
Unlike traditional cloud computing providers that serve a broad range of industries, neocloud companies such as Nebius and CoreWeave largely focus on technology customers and offer specialised computing infrastructure for artificial intelligence.
Investors have increasingly bet against US neocloud and data centre companies amid concerns that their debt-funded expansion plans may prove unsustainable, triggering a sell-off in the sector.
SpaceX’s growing investment in AI comes as the company expands beyond its established satellite internet and rocket launch businesses. Its revenue rose 161 per cent year-on-year to $14.58 billion in the three months ended September 30, while AI revenue surged nearly tenfold to $7.56 billion.
The figures highlight the increasing importance of artificial intelligence to SpaceX’s financial performance, even as its Starlink satellite internet business remains a major source of revenue and its long-term ambitions depend partly on bringing its Starship rockets into regular service.
Musk is also pursuing plans to manufacture advanced chips through Terafab, a semiconductor manufacturing joint venture between SpaceX and Tesla in Austin, Texas.
The project is expected to produce its first test chip around May or June 2027, with volume production targeted for the third quarter of 2028.
During an investor conference call last week, Musk said a merger between SpaceX and Tesla could be “a good idea,” pointing to the growing overlap between the two companies.
SpaceX had also identified manufacturing its own GPUs as one of its substantial planned capital expenditures in its registration statement ahead of its initial public offering, warning prospective investors about the significant spending required to develop AI and other technologies.
