Why SpaceX Just Borrowed $40 Billion to Buy AI Chips

On Sunday, 25 October 2026, Elon Musk said in a post on X that SpaceX had closed $40 billion in debt financing to buy graphics processing units, the chips that run AI. He added that debt markets have "almost entirely shut off access to money" for AI cloud companies that do not have big revenue from elsewhere.  

Wait, SpaceX makes AI now?

Yes. SpaceX is best known for rockets and the Starlink satellite internet service. It has absorbed Musk's AI company xAI and, per reports, went public in June. In the three months to 30 September it reported revenue of $14.58 billion, up 161%, and AI revenue of $7.56 billion, up almost tenfold.

Put that in naira terms. If SpaceX earned ₦100:

• about ₦52 came from AI
• about ₦48 came from everything else, including Starlink and launches

AI is now the biggest part of the business.

What is callable debt?

Debt is "callable" when the borrower can repay it early. Musk said most of the $40 billion is callable. For SpaceX that gives flexibility: if its cash flow improves or interest rates fall, it can pay back or refinance sooner. Lenders usually charge for that option, but the price has not been disclosed.

What will the money buy?

Musk said the debt is for chips arriving in the first and second quarters of 2027. Reuters earlier reported that SpaceX was seeking the money to buy Nvidia chips. The number of chips and the supplier have not been confirmed by SpaceX.

For scale, SpaceX's chief financial officer, Bret Johnsen, said it expects to spend $35 billion to $40 billion on equipment and facilities in the current quarter. Last quarter's total revenue was $14.58 billion.

Who lent the money?

Unconfirmed. The Financial Times reported earlier in October that Apollo Global Management was expected to lead a package of roughly $40 billion, made up of about $10 billion in bank loans and $30 billion in investment-grade debt. Musk did not say whether his announcement is that deal. The interest rate has not been disclosed.

Musk credited SpaceX's investment-grade standing and its Starlink and launch income. A credit rating is a lender's grade on how safely a borrower repays. We have not seen the rating itself.

What is a neocloud, and why is Musk worried?

Neoclouds are newer companies that rent out AI computing power. CoreWeave and Nebius are the best-known. Musk predicted that of the more than 200 such firms, many will fail or merge, a "guppy-level death and consolidation," and said SpaceX will not buy any of them.

Venture investor Chamath Palihapitiya, quoted by CoinDesk, said many neoclouds are poorly funded and badly run, and warned that data-centre delays could leave chips idle in 2027.

Markets seem to be listening. CoreWeave closed at $54.24 on 23 October and has fallen more than 37% in a month, following a widely shared chart of its rising bond yields.

The Jargon

• GPU: graphics processing unit, the chip that powers AI.
• Callable debt: debt the borrower can repay early.
• Investment-grade: a credit rating signalling lower default risk.
• Neocloud: a newer company renting out AI computing power.
• Bond yield: the return lenders demand; rising yields mean borrowing is getting dearer or riskier.

The Bigger Picture

Fact versus claim. The debt announcement, the revenue figures and the capital spending guidance come from Musk's post and company officers as reported by Reuters. The neocloud collapse prediction, including the guppy-level death and consolidation line and a forecast that more than 200 neoclouds will thin to a few, is Musk's opinion. He also said SpaceX will not buy any of them.

Outside voice. Investor Chamath Palihapitiya said many neoclouds are poorly funded and badly run, and warned data-centre delays could leave chips idle in 2027. That is also opinion.

Interest of the speaker. Musk benefits from SpaceX appearing safe and rivals appearing fragile. The CoreWeave bond-yield fall is independent evidence, but it covers one company.

What to watch

This section is Rainingmoney's reading.

• The actual terms: lender, interest rate and what "closed" means.
• Whether CoreWeave or Nebius sign new financing, or pay more for it.
• Whether SpaceX's AI revenue keeps growing as fast as its spending.
• Whether chip deliveries in early 2027 meet data-centre readiness.

• What we do not know

  We do not know the lenders, the cost of the debt, or the credit rating. Musk has a clear interest in presenting SpaceX as the safe borrower and its rivals as the weak ones, so treat the neocloud forecast as his view, not a finding.