$40 billion to buy a GPU! Musk claims SpaceX (SPCX.US) off-balance sheet financing has landed and bombarded “New Cloud” to the point where blood will flow

The Zhitong Finance App learned that Elon Musk said SpaceX (SPCX.US) has completed a $40 billion debt transaction to purchase chips to support its artificial intelligence (AI) layout.

When posting on the X platform about this off-balance sheet financing, Musk wrote that thanks to its investment-grade credit rating and revenue from the Starlink satellite business and rocket launches, SpaceX finally completed this debt financing to pay for Nvidia (NVDA.US)'s graphics processor (GPU) costs. In emphasizing the diversification of SpaceX's business, Musk is trying to draw the line between the company and so-called “neoclouds (neoclouds)” — the latter selling high-end computing power to technology companies. Over the past two weeks, such computing power cloud companies have been under tremendous market scrutiny due to high debt and questionable demand prospects.

“In the past few weeks, the debt market has cut off almost all financing channels that cannot break away from AI data centers to form independent and stable revenue companies,” Musk said in the post. “More than 200 new cloud vendors are about to usher in large-scale liquidation and integration, and few can survive.” He later stated that SpaceX would not buy any new cloud vendors, calling the move “meaningless.”

From Musk's post last Sunday, it's not immediately clear what he meant by “finalizing” the deal, nor is it clear whether investors have agreed on debt pricing.

SpaceX is not entirely immune to concerns about the growing AI infrastructure boom. According to reports last Friday, discussions on the final pricing of its 40 billion US dollar chip financing structure are stuck in the midst of this round of market turmoil in the Xinyun sector.

Bankers led by Goldman Sachs have been discussing the structure with investors led by Apollo Global Management, and Apollo-supported Atlas SP plans to manage this vehicle, according to people familiar with the matter. People familiar with the matter, who requested anonymity to discuss private information, also said that Pacific Investment Management Company (PIMCO) had also considered investing. According to people familiar with the matter, the debt is expected to be issued in the form of a private placement called 144a.

Through the latest structure, SpaceX will avoid repeating the mistakes of Musk's AI startup XAI's financing attempt last year. In that deal, an entity sought to obtain up to $20 billion of off-balance sheet debt through a sale-leaseback agreement with Valor Equity Partners. However, according to SpaceX's latest financial report, after the arrangement was determined to be a “sale and leaseback that did not meet the sales conditions,” SpaceX eventually had to add about 13 billion US dollars of debt to its balance sheet.

Prior to this debt financing, SpaceX had just handed over strong third-quarter earnings reports, and its AI division was profitable for the first time. The business is increasingly driving revenue growth by selling computing power from its Memphis data center to external AI labs and hyperscale cloud service providers.

During the SpaceX earnings call, Chief Financial Officer Brett Johnson said the company is discussing further financing with lenders.

“We are very confident that we can do this in a very controlled manner and continue to maintain our investment-grade position in the process,” he said, pointing to the company's investment grade rating.