Elon Musk's company SpaceX has locked in roughly $40 billion in funding dedicated to artificial intelligence chips and data center hardware, which the firm describes as the biggest committed GPU financing agreement in history.
Revealed on October 26, the pact enables SpaceX to buy Nvidia's upcoming AI processors and scale up the computing systems behind its cloud offerings and Grok chatbot.
Apollo Global Management organized the funding, representing a substantial investment in the fast-expanding artificial intelligence sector of SpaceX.
How the Record $40 Billion Deal Works
Based on the contract, a firm overseen by Apollo will buy the graphics processing units and server hardware, then lease them out to SpaceX.
This structure permits SpaceX to use costly artificial intelligence machinery without covering the full purchase price upfront.
Hardware will be leased for a span of about five to five-and-a-quarter years, with every lease starting upon delivery of the equipment.
SpaceX anticipates the transaction will conclude prior to the close of 2026, pending final conditions, while hardware shipments and lease payments should kick off in the first half of 2027.
Bret Johnsen, the chief financial officer at SpaceX, stated the pact will assist the enterprise in obtaining necessary expansion capital while lowering its reliance on conventional loans.
He additionally asserted that certain investments in artificial intelligence infrastructure are recouping their expenses in under twelve months.
SpaceX to Acquire Nvidia's Next-Generation AI Chips
The funding will back the acquisition of upcoming Vera Rubin chips from Nvidia, built for high-performance artificial intelligence computation.
SpaceX intends to set up the machinery within terrestrial data centers to boost processing power for cloud services and Grok.
This agreement arrives as artificial intelligence firms globally invest heavily in robust processors and facilities to power more sophisticated models.
Instead of acquiring all hardware outright, SpaceX relies on the leasing framework to distribute expenses across multiple years.
AI Business Generates $7.6 Billion in Revenue
This massive funding announcement follows robust expansion reported by the artificial intelligence division of SpaceX during the third quarter of 2026.
Artificial intelligence operations, encompassing cloud computing, Cursor, and Grok, brought in roughly $7.6 billion in revenue for the quarter.
That figure represented over half of the total $14.6 billion revenue recorded by SpaceX, surpassing the combined income of its rocket launch and Starlink divisions.
At the same time, expenditures at the company climbed sharply.
Capital spending by SpaceX hit nearly $20 billion over the quarter, contrasted with $6.9 billion during the same period a year prior.
The business anticipates spending an additional $35 billion to $40 billion throughout the fourth quarter while scaling up its artificial intelligence infrastructure.
Elon Musk Warns Rival AI Companies
The disclosure takes place as backers grow increasingly worried about steep expenses tied to constructing artificial intelligence data centers and whether smaller firms can bring in adequate income.
Musk contends that SpaceX holds an edge over competitors relying solely on renting out computing capacity, given that it also brings in earnings from rocket launches and Starlink.
He cautioned that a large portion of the more than 200 businesses focused on artificial intelligence computing might encounter monetary trouble or face mandatory mergers.
In the view of Musk, enterprises lacking major income streams outside of artificial intelligence facilities are struggling more and more to secure capital.
For SpaceX, the $40 billion arrangement supplies an extra funding channel as the enterprise keeps growing its artificial intelligence operations.
The business characterized the pact as the biggest committed graphics processing unit financing agreement ever, though the transaction remains on track to finalize before the year ends.
