SpaceX (SPACX.US) is not easy to expand its AI computing power! A US$40 billion GPU equipment financial lease agreement was reached with Apollo Global Management (APO.US)

The Zhitong Finance App learned that SpaceX (SPCX.US) and alternative asset management giant Apollo Global Management (APO.US) signed a financial lease agreement for GPU and related equipment owners worth about 40 billion US dollars to fund the chip procurement needed to achieve its artificial intelligence (AI) ambitions.

The largest GPU financing agreement to date will provide the next generation Nvidia (NVDA.US) Vera Rubin chips for SpaceX's terrestrial computing construction. SpaceX said in a document submitted on Monday that the fixed interest rate to be paid by the company will be determined at the time of pricing, and the deal has not yet been priced. The deal is expected to be completed before the end of the year, and related leasing arrangements are expected to commence in the first half of next year.

In a post posted on the X platform last weekend, Elon Musk strongly promoted the deal, saying it would help fund the purchase of Nvidia (NVDA.US) graphics processors (GPUs). SpaceX said in a statement on Monday: “This leasing arrangement further diversifies our funding sources and guarantees a significant portion of the funding needed to achieve our growth plans.”

The agreement comes at a time when artificial intelligence companies have experienced a turbulent week in the debt market. As the market becomes increasingly concerned about the industry's rapidly increasing spending and the limited return on profits so far, investors are demanding higher and higher risk premiums to finance AI infrastructure construction.

Investors' concerns mainly focus on so-called “neocloud” (neocloud) companies. These types of companies sell high-end computing power to technology companies. Musk has always tried to differentiate SpaceX from these companies and emphasized SpaceX's revenue from the Starlink (Starlink) business and rocket launch business.

Although SpaceX received investment grade ratings from the world's top three credit rating agencies, the price of the company's own debt has also dropped sharply in recent weeks. SpaceX-related credit default swaps (CDS) were used to hedge against potential losses on the company's debts. The price of such swaps surged to a record 266 basis points at the close last Friday, a level that is generally closer to the risk level for trash-rated borrowers. ICE Data Services' price data showed that during Monday's early trading, related concerns were slightly mitigated, and the SpaceX credit default swap transaction level was about 261 basis points.