Key points
- SpaceX faces higher rates on $40 billion chip financing
- A separate borrower would help protect SpaceX's credit ratings
- Earlier Valor deals account for $12.9 billion of SpaceX's debt
SpaceX (SPCX) faces higher borrowing costs on a planned $40 billion financing to buy Nvidia (NVDA) chips, according to an October 23 Bloomberg report. Turmoil in AI credit markets has reopened negotiations over the rates investors would receive.
The proposed deal would put the borrowing in a special purpose vehicle, a separate entity set up to finance the chip purchases. The structure aims to keep the debt off SpaceX's balance sheet and preserve its investment-grade credit ratings.
Goldman Sachs (GS) is leading the financing talks with investors headed by Apollo Global Management (APO). Apollo-backed Atlas SP would manage the vehicle, while bond fund Pimco is considering participating.
The bonds would be sold privately in three portions, or tranches. The largest, about $25 billion to $30 billion, would rank behind the other debt for repayment if the vehicle ran into trouble. The two other portions would be about $10 billion and up to $5 billion. Earlier discussions put the yield on the lowest-ranking debt in the mid-8% range. Those terms are now being revisited.
Semafor reported a day earlier that the financing was being finalized, with the lowest-rated portion expected to yield about 8.3%. A safer portion, backed partly by the chips, was expected to price near 7.75% the following week, more than a percentage point above the yield on SpaceX's existing bonds.
SpaceX is trying to preserve its credit ratings while facing higher costs to finance its AI expansion. The deal remains unfinished, and pricing could still change. Goldman and Apollo declined to comment.
SpaceX shares closed up 1.9% at $147.49 on Friday, October 23, and were little changed after hours.
SpaceX's earlier AI equipment leases ended up as debt
SpaceX has used outside financing for AI hardware before. Its CTC Property subsidiary sold AI infrastructure hardware to Valor Equity Partners and leased it back. SpaceX says the transactions did not qualify as sales for accounting purposes, so it records the financing as debt.
SpaceX's third-quarter 10-Q filing shows $12.9 billion of debt tied to the Valor leases on September 30, up from $4.5 billion at the end of 2025. SpaceX recorded $864 million of interest expense on those leases in the first nine months of 2026. Valor's founder and chief executive, Antonio Gracias, is a SpaceX director.
SpaceX's total debt reached $38 billion in principal at the end of September, up from $22 billion at the end of 2025. The company also held $51.3 billion in cash and $38.6 billion in marketable securities. In its third-quarter release on October 20, SpaceX's chief financial officer said the company is building with a focus on capital efficiency and "maintaining a robust, investment-grade balance sheet."
SpaceX's Super Intelligence segment, which houses its AI business, posted $431 million of operating income in the third quarter after a $1.26 billion loss in the second. It accounted for $16.4 billion of SpaceX's $19.6 billion in capital spending in the quarter.
The Financial Times first described the $40 billion plan on October 6 as about $10 billion of bank loans and $30 billion of investment-grade debt. SpaceX shares have fallen 14.2% since that day's close of $171.92.
Lending to AI companies has pulled back sharply over the past few weeks. Bond spreads for AI borrowers are one of the inputs to our AI bubble index. On October 15, the cost of insuring CoreWeave (CRWV) debt against default hit a record.
