Key points
- SpaceX signed a $40 billion lease commitment, not a completed deal
- SpaceX's quarterly rent includes principal, interest, and other costs
- SpaceX's lease rate has yet to be set
I opened SpaceX's (SPCX) new 8-K on October 26 to see the terms behind Elon Musk's statement that the company had closed $40 billion of GPU debt. The first thing that stood out was the status: SpaceX had signed a binding commitment, but the transaction still had to close.
The commitment, signed October 24, covers leases of GPU pods and related data center equipment from an entity managed by Apollo Global Management (APO). SpaceX expects principal payments, the amount financed not counting interest, to total about $40 billion. Closing is expected before year-end, subject to conditions, with the leases starting in the first half of 2027 as equipment arrives.
SpaceX shares traded at $147.82 at 9 a.m. Eastern, up 0.2% from their October 23 close of $147.49.
What the quarterly payments would look like
The next detail I looked for was how SpaceX would pay. The Apollo-managed entity will buy the equipment and lease it to SpaceX for use at data centers SpaceX selects. Deliveries will come in batches, each with its own lease lasting about five to five and a quarter years.
The filing lays out a quarterly rent formula. Payments are due in advance and generally include three components: one-twentieth of the amount financed for that batch, interest at a fixed annual rate on the remaining balance, and certain ongoing costs.
Applied to the full $40 billion, that formula implies about $2 billion a quarter in principal alone, by our calculations. Actual quarterly payments will depend on when each equipment batch arrives and its lease begins.
The missing number is the interest rate. SpaceX says it will be set before the final lease agreement is signed, so the filing doesn't yet tell us the full cost.
Earlier reporting provides context, but not that missing rate. On October 22, Semafor said the riskiest part of the proposed debt was expected to carry interest rates of about 8.3%, with a safer portion near 7.75%. A day later, turmoil in AI credit markets had reopened pricing talks. Those figures concerned portions of the financing; they don't establish what SpaceX will pay under its leases.
Didn't Musk say it closed?
Elon Musk wrote on X on October 25 that "SpaceX closed $40B of debt for GPUs." That was the day after SpaceX signed the commitment, and we covered that post at the time.
The 8-K describes an earlier stage. A binding commitment letter is a signed promise to enter the final lease once certain conditions are met. The filing's risk warnings say that the transaction "may not close on the anticipated terms or timeline, or at all."
The filing calls it a finance lease
Earlier reports focused on how the equipment purchases would be financed. The Financial Times described a plan on October 6 for about $10 billion of bank loans and $30 billion of debt rated as relatively safe. Bloomberg later described a separate entity that would borrow the money in three portions, a setup meant to keep the debt off SpaceX's balance sheet.
The 8-K describes SpaceX's commitment to lease that equipment. The only other party it names is the Apollo-managed entity that will own the equipment. Goldman Sachs (GS), Pimco, and Nvidia (NVDA) came up in earlier reports, while the filing refers to the hardware as graphics processing unit pods and related equipment. The filing doesn't say how the lessor will raise its own money.
The 8-K doesn't say which chips the pods will carry. On SpaceX's August 4 earnings call, Musk said, "Going forward, we have decided to build exclusively on Nvidia, because we think the Vera Rubin architecture is the best architecture."
Under U.S. accounting rules, a company with a finance lease generally records the right to use the equipment as an asset and the payments it owes as a liability on its own balance sheet. SpaceX's reports after the leases start in 2027 would show how it records them.
SpaceX has leased AI hardware before. Its CTC Property unit sold AI equipment to Valor Equity Partners and leased it back, and SpaceX counts those deals as debt. That debt reached $12.9 billion on September 30, as we noted last week.
The interest rate, the closing date, and the delivery dates for each batch are still to come. We're following the deal alongside other AI borrowing on our AI debt tracker.
