Musk says SpaceX closed $40 billion in GPU debt financing and predicts a neocloud shakeout
Elon Musk said on Oct. 25 that SpaceX had closed $40 billion in debt financing for AI graphics processors, and warned that debt markets have almost entirely shut off credit to companies that depend on AI data centers for revenue.
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Elon Musk said on Sunday, Oct. 25 that SpaceX had closed $40 billion in debt financing for graphics processing units (GPUs), underscoring the soaring cost of building AI computing capacity. In a post on X, Musk attributed the raise to the company's investment-grade status and revenue from its Starlink satellite internet and launch businesses, Reuters reported.
"This is primarily callable debt for GPU purchases that will arrive in Q1 and Q2. Not a major factor this quarter," Musk wrote. Reuters noted it was not immediately clear what he meant by the deal being "closed" or whether investors had agreed to pricing. Reuters reported earlier this month that SpaceX was in talks with banks and asset managers to raise $40 billion to buy Nvidia AI chips.
Musk also said debt markets "have almost entirely shut off access to money for any company that doesn't have substantial revenue independent of AI data centers." He predicted that neocloud companies, which rent out AI-tailored computing capacity, would face significant consolidation and failures, and later said SpaceX would not buy any neoclouds, calling it "pointless." Unlike the large cloud providers that serve many industries, neoclouds such as Nebius and CoreWeave mostly serve tech customers. Investors have started betting against US neocloud and data center companies amid fears that their debt-fueled buildout is unsustainable.
SpaceX Chief Financial Officer Bret Johnsen expects fourth-quarter capital expenditure of $35 billion to $40 billion. SpaceX's revenue rose 161% from a year earlier to $14.58 billion in the three months ended Sept. 30, and its AI revenue jumped almost tenfold to $7.56 billion, which Reuters called the clearest evidence yet that the company's heavy AI investment is paying off.
Terafab, the chipmaking joint venture between SpaceX and Tesla in Austin, is expected to produce its first test chip around May or June of next year and aims to reach volume production by the third quarter of 2028.
Sources: Reuters (via CNA), Reuters (via Investing.com). Image: Reuters / Gonzalo Fuentes (via CNA).
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