SpaceX is seeking $40 billion in financing to fund purchases of Nvidia AI chips, reportedly for xAI's Colossus AI compute build-out.

HAWTHORNE, California: SpaceX is seeking $40 billion in financing for a major purchase of Nvidia artificial intelligence chips as the Elon Musk-led company expands its computing infrastructure, according to two sources familiar with the matter.

The company is in talks with banks and asset managers to raise the funds. One source told Reuters that SpaceX is in discussions with the asset manager PIMCO. The source also confirmed an earlier Financial Times report that SpaceX is looking to raise about $10 billion in bank loans and $30 billion in investment-grade debt for the chip order.

The Financial Times reported that Apollo is expected to lead the SpaceX deal and help place the debt with a broad range of investors. SpaceX and Nvidia did not immediately respond to requests for comment. Apollo and PIMCO declined to comment. The sources declined to be identified because the deal is not yet public.

The proposed funding underscores the enormous capital requirements of the AI boom, as technology companies race to secure advanced processors and build the computing infrastructure needed to support AI development. Morgan Stanley estimates that AI infrastructure will require $1.5 trillion in external financing by 2028, even as lenders and investors grow more cautious about funding the industry's expansion.

Shares of the rocket and spacecraft manufacturer fell 2% in early trading, while Nvidia's stock rose 0.5%.

Musk took SpaceX public in June in a record $86 billion initial public offering. Last month, he said that xAI's Colossus 2 data center could more than double the number of Nvidia chips it uses by December. He also said the company plans to use Nvidia hardware exclusively to build its data centers.

Nvidia, the dominant supplier of AI processors, partnered in August with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR on financing platforms intended to mobilize more than $500 billion for AI infrastructure projects.