Apollo Capital Management Several banks are in talks space x worth $40 billion by the company. Nvidia The company was involved in the development of graphics processing equipment, said a person familiar with the talks, who requested anonymity regarding the matter.
The deal will rely primarily on the investment-grade debt market, which SpaceX tapped just four months ago, the people said.
Two weeks after its record-setting IPO in mid-June, the space exploration company has raised $25 billion in bonds of varying duration. CNBC reported at the time that SpaceX’s bond sale was in incredibly high demand, highlighting strong interest from bond investors.
But since then, AI-related bonds have sold off and credit spreads have widened.
SpaceX’s $40 billion debt deal is likely to use GPUs as collateral, and Apollo Capital is said to be playing a leading role in facilitating the financing, the people said.
Apollo declined to comment. Nvidia did not respond to requests for comment.
The market still operates under the expectation that GPUs will maintain their value for about seven years, said a credit industry official who requested anonymity for this story. Computing power is in short supply, and that shortage is not expected to go away anytime soon, supporting the value of high-performance GPUs.
The Financial Times first reported on the funding talks.
A bond transaction of this size is noteworthy, as it follows a series of bond issuances from the United States. meta, Amazon and google Because the cost of funding the construction of AI becomes more expensive.
Both sources told CNBC that bond sales are expected to increase and bond investors are demanding higher yields to repay bonds, a sign that participants are becoming more selective about their exposure to AI.
