SpaceX (SPACX.US) is not holding back on expanding AI computing power! It has reached a US$40 billion GPU equipment financing lease agreement with Apollo Global Management Inc (APO.US).

SpaceX (SPCX.US) has signed a master financing lease agreement worth approximately US$40 billion for GPUs and related equipment with alternative asset management giant Apollo Global Management Inc (APO.US), funding the chip purchases needed to realize its artificial intelligence (AI) ambitions. This GPU financing agreement, the largest of its kind to date, will provide SpaceX's ground-based computing buildout with next-generation NVIDIA Corporation (NVDA.US) Vera Rubin chips. SpaceX said in a filing submitted on Monday that the fixed interest rate it will need to pay will be determined at pricing, and the transaction has not yet been priced. The deal is expected to be completed before the end of the year, and the related leasing arrangement is expected to commence in the first half of next year. In a post published on X over the weekend, Elon Musk heavily promoted the deal, saying it would help fund the purchase of NVIDIA Corporation (NVDA.US) graphics processing units (GPUs). SpaceX said in a statement on Monday: "This leasing arrangement diversifies our funding sources and secures a substantial portion of the capital needed to execute our growth plans." The agreement comes as AI companies have endured a turbulent week in the debt market. With growing concerns over the industry's rapidly increasing spending and so far limited profit returns, investors are demanding increasingly higher risk premiums to finance AI infrastructure buildout. Investor concerns are mainly concentrated on so-called "neocloud" companies. These companies sell high-end computing power to technology firms. Musk has sought to distinguish SpaceX from these companies, emphasizing SpaceX's revenue from its Starlink business and rocket launch operations. Although SpaceX has obtained investment-grade ratings from the world's three major credit rating agencies, the price of the company's own debt has also fallen sharply in recent weeks. Credit default swaps (CDS) linked to SpaceX are used to hedge against potential losses on the company's debt. At Friday's close, the price of such swaps surged to a record 266 basis points, a level typically closer to the risk level of junk-rated borrowers. In early trading on Monday, concerns eased slightly, with SpaceX credit default swaps trading at about 261 basis points, according to price data from ICE Data Services.