SpaceX is planning a massive $40 billion debt raise to buy Nvidia chips. The financial structure of this deal is quite wild. $40 billion is roughly equal to SpaceX’s entire projected revenue for the year. They are splitting the package into $10 billion in bank loans and $30 billion in investment-grade bonds, with Apollo Global Management leading the deal. For anyone trading Nvidia (NVDA), this shuts down the argument that AI hardware demand is slowing down. The fascinating part is the cash loop: Nvidia owns about $21 billion worth of SpaceX stock. SpaceX is essentially taking on historic debt from Wall Street to hand billions of dollars straight back to Nvidia for chips, which in turn props up the value of Nvidia’s own balance sheet. If this deal goes through as planned by 2027, it shows that major companies are willing to push their finances to the absolute limit just to secure computing power. Anyone worried SpaceX is taking on this much leverage for hardware?
Source: Bloomberg
h/t unconventionalbook
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