SpaceX closed $40 billion debt deal for AI chips, Elon Musk says

SpaceX has closed $40 billion in debt financing to purchase graphics processing units for artificial intelligence systems, Elon Musk announced on Sunday, October 25, 2026. Elon Musk said the financing primarily consists of callable debt for graphics processing units, which is expected to arrive in the first and second quarters of 2027.

SpaceX Uses Special Vehicle to Preserve Credit Ratings

According to Bloomberg, Goldman Sachs spearheaded negotiations with investors, such as Apollo Global Management, for a deal that utilizes a special purpose vehicle to shield SpaceX’s balance sheet from the debt and maintain its investment-grade credit ratings. Earlier reports estimated the deal included $30 billion in bonds and $10 billion in bank loans. Musk also suggested that companies lacking significant revenue streams outside of AI data centers have largely been cut off from financing in the debt markets.

Musk Predicts Widespread Failures for Neocloud Companies

More than 200 neocloud companies providing cloud computing infrastructure specifically designed for artificial intelligence will face widespread failures and consolidation, according to Musk. He wrote that “some will make it through, but not many.” Yahoo Finance and Business Insider reported that neocloud firms like CoreWeave and Nebius mostly focus on tech customers and borrow heavily to buy chips, with CoreWeave facing rising bond yields and obligations reported near $50 billion. On October 14, investor Chamath Palihapitiya shared a chart showing a CoreWeave bond yield exceeding 15%, to which Musk replied “Yikes.” The yield on a $2.75 billion CoreWeave bond due in 2031 has since reached a record 15.76%. Musk stated that SpaceX will not buy any neoclouds, calling such acquisitions pointless, while noting that debt markets have almost entirely stopped funding companies that earn their money solely from AI data centers.

Power Shortages Risk Stranded Compute in Data Centers

Musk warned on Friday that the industry will encounter “stranded compute in partially complete data centers,” referring to hardware that is ready but cannot be deployed because centers lack the equipment to activate it. Business Insider reported that Amazon Web Services expects $5 billion in Nvidia GB300 racks but lacks sufficient power in its data centers to run them, meaning the units will be kept in warehouses. A Bernstein Research report projected that only 35% of planned U.S. data center capacity will be built. While the report predicted hyperscalers such as Microsoft, Meta, Google, and Amazon will likely finish their projects, it labeled newcomers like Kevin O’Leary’s 15-gigawatt pledge as “bragawatts” that are unlikely to be realized. Additionally, “neolabs”—small AI model startups such as Ilya Sutskever’s Safe Superintelligence and Mira Murati’s Thinking Machines Lab—face pressure and competition from giants like OpenAI and Anthropic.

AI Unit Revenue Climbs to 14.58 Billion Dollars

This AI unit now earns more than the company’s connectivity business. Total revenue for the three months ended September 30 climbed 161% to $14.58 billion. Chief Financial Officer Bret Johnsen guided fourth-quarter capital expenditure to $35 billion to $40 billion, though Musk noted that fourth-quarter capital spending would not be a major factor in the recently closed debt package.

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