“The Big Money Show” panel discusses SpaceX reporting a 161% increase in revenue as Elon Musk addresses a possible merger with Tesla.
Elon Musk said SpaceX has closed $40 billion in debt financing to buy graphics processing units for its artificial intelligence operations, highlighting the huge sums being spent in the race to boost AI computing capabilities.
Musk announced the funding on Sunday, saying SpaceX was able to get the money because of its investment status and revenue generated outside of AI through its Starlink satellite internet and rocket launch businesses.
“SpaceX closed $40 billion in GPU debt, but we are investment grade and have Starlink and launch revenue,” Musk said.
Graphics processing units, or GPUs, are advanced chips that provide the computing power needed to train and operate AI systems.
ELON MUSK SAYS DEMAND FOR TESLA VEHICLES EXCEEDS PRODUCTION AHEAD OF CYBERCAB LAUNCH IN DALLAS
Elon Musk said SpaceX has closed $40 billion in debt financing to buy advanced computer chips for its artificial intelligence operations. (Francis Chung/Politico/Bloomberg via Getty Images / Getty Images)
Reuters previously reported that SpaceX was in talks with banks and asset managers to raise $40 billion to buy Nvidia AI chips.
“This is primarily debt due for GPU purchases that will arrive in Q1 and Q2,” Musk said in a follow-up post on
It was not immediately clear whether investors had agreed to the debt pricing terms.
The funding underscores the cost of the AI race as companies spend heavily on advanced chips and other computing infrastructure.
UKRAINE RECOVERS CRITICAL STARLINK SERVICE AFTER RESTRICTIONS DISRUPT DRONE OPERATIONS
SpaceX CEO Elon Musk announced a $40 billion financing deal on Sunday, citing the company’s investment status and revenue generated from Starlink and rocket launches. (Fabrice Coffrini / AFP via Getty Images / Getty Images)
SpaceX Chief Financial Officer Bret Johnsen said the company plans to spend between $35 billion and $40 billion in capital expenditures in the fourth quarter alone, according to Reuters.
Musk also said that borrowing conditions have deteriorated significantly for companies that rely heavily on AI infrastructure.
| Teleprinter | Security | Last | Change | Change % |
|---|---|---|---|---|
| TSLA | NO DATA AVAILABLE | – | – | – |
“Over the past few weeks, debt markets have almost entirely closed off access to money to any company that does not have substantial revenue independent of AI data centers,” he said.
Musk warned that many of these companies may struggle to survive.
Trump hails Elon Musk as a ‘genius’ while defending him against possible Democratic investigations.
Elon Musk, Chief Technology Officer of X, speaks during a conference on June 19, 2024 in Cannes, France. (Richard Bord/WireImage/Getty Images)
“That means more than 200 neoclouds are going to experience guppy-level death and consolidation,” Musk said, referring to companies that lease computing power designed primarily for AI customers. “Some will, but not many.”
SpaceX’s established businesses, including Starlink and rocket launches, provide revenue streams outside of its AI operations.
SpaceX’s third-quarter revenue rose 161% from a year earlier to $14.58 billion, according to Reuters.
Musk suggested last week that a possible merger of Tesla and SpaceX would be “a good idea.”
GET FOX BUSINESS ON THE GO
He also said the two companies had formed special committees made up of independent directors to explore a potential deal, although Musk stressed that a merger was not certain.
Reuters contributed to this report.
Gn bussni
