SpaceX looks to $40 billion debt raise to buy chips

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Elon Musk’s SpaceX is the in-betweener in the AI capex wars. SpaceX’s reported $40 billion debt raise to buy Nvidia chips shows it is stuck between mature tech giants like Google and Meta and startups like OpenAI and Anthropic, whose private status tends to forgive their inability to pay their own bills.
SpaceX carries five times more debt than Alphabet, and three times more debt than Meta, relative to their respective profits, and while money from Starlink helps prop up SpaceX’s cash-guzzling rocket business, it isn’t nearly the cash cow that rivals’ ad businesses are. It needs to borrow because it’s spending more on AI than it’s taking in from the rest of its businesses.
By going public in June, SpaceX locked itself out of the raise-and-pray venture capital world. But its stock price’s sideways lurch since then makes it unattractive to issue new shares to pay for its growing AI tab. Its BBB credit rating is two notches below Meta and Alphabet, and a tougher sell with blue-chip bond funds; enter Apollo, which has a pot of money to match seemingly every risk out there (including cash-strapped governments!). Oracle finds itself in a similar position.

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