SpaceX Strikes $40B GPU Financing Deal With Apollo – Deliveries Expected In 2027

• SpaceX expects total principal payments of roughly $40 billion, with the agreement expected to close before year-end.
• SpaceX said the financing will support deployment of Nvidia’s next-generation Vera Rubin chips, according to The Fly.
• Earlier, Elon Musk warned that financing is becoming increasingly difficult for neoclouds.

SpaceX (SPCX) was in the spotlight on Monday after the company confirmed it had secured a binding commitment for about $40 billion in graphics processing unit (GPU) financing, a major step in its plans to expand its AI computing infrastructure.

SpaceX signed the deal with an entity managed by Apollo Global Management (APO). Earlier this month, the Financial Times reported that the Elon-Musk led firm was seeking to raise $40 billion to purchase Nvidia chips. Musk had said on X that SpaceX secured $40 billion in GPU financing late Sunday.

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At the time of writing, SPCX shares were down 0.6%.

$40B Financing For NVDA GPUs

According to an SEC filing on Monday, SpaceX entered into the commitment on October 24 to lease GPUs and related data-center equipment. As part of the deal, the Apollo-managed entity will purchase the equipment and lease it to SpaceX.

Equipment will be delivered in batches, with each lease running five to five-and-a-quarter years. SpaceX expects total principal payments of roughly $40 billion, with the agreement expected to close before year-end and GPU deliveries beginning in the first half of 2027.

SpaceX said the financing will support deployment of Nvidia’s (NVDA) next-generation Vera Rubin chips, according to The Fly. Funds associated with BlackRock (BLK) and KKR (KKR) also made financing commitments.

“SpaceX aims to deploy the largest compute infrastructure in the world. As demand for compute continues to accelerate, we’re seeing less than one-year payback periods on our SI (super intelligence) infrastructure investments,” said CFO Bret Johnsen.

“This lease diversifies our funding sources and addresses a notable portion of the funding required to deliver on our growth plans as we aim to get additional compute online at record speeds to power Grok for enterprises and consumers, as well as serve existing and future cloud services customers.”

Musk Warns Of Funding Crunch For Neoclouds

The announcement comes amid Musk’s warning that financing is becoming increasingly difficult for neoclouds without significant revenue from other businesses.

Musk said SpaceX’s investment-grade credit rating and revenue from Starlink and rocket launches helped secure the financing.

Bernstein Raises SpaceX Target

Meanwhile, Bernstein raised its price target on SpaceX to $267 from $248, and maintained an ‘Outperform’ rating, according to The Fly. This represents an 80% upside potential from current levels.

The firm cited stronger prospects for SpaceX’s terrestrial AI buildout for the price target hike. Bernstein also sees improving performance in SpaceX’s enterprise and government connectivity business, while noting that a multitrillion-dollar valuation ultimately depends on the success of orbital data centers.

Retail Remains ‘Extremely Bullish’

Retail sentiment surrounding SPCX on Stocktwits remained ‘extremely bullish’ over the past 24 hours, amid ‘extremely high’ message volumes.

However, one user sounded concerned about potential pressure on the shares in the future.

The stock is up more than 9% over its IPO price of $135.

Also read: TSLA Is The Worst-Performing Mag 7 Stock This Year But Leads The Pack In October – Barclays Sees 19% Upside Potential

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