SpaceX just committed to $40 billion of Nvidia GPU financing, arranged by Apollo in what SpaceX is calling the largest committed GPU financing ever.
An Apollo-managed entity will buy the chips and lease them to SpaceX. Goldman Sachs is the sole structuring agent. BlackRock, Goldman Sachs Asset Management, and KKR-advised capital accounts have made anchor commitments.
But it’s not the marquee lineup I want to talk about today. It’s how the deal works, and who will end up owning the exposure.
According to SpaceX’s October 26 SEC filing, the company will repay the full cost of the GPUs through twenty quarterly installments, with interest on top. (Apollo isn’t running a charity.)
If you squint a little, this looks like an amortizing loan. Except Apollo’s vehicle owns the GPUs and SpaceX rents them. Now, you remember that Nvidia chips have an inconvenient habit: they get old. The financing doesn’t make that problem go away.
But there’s another reason I was interested. Apollo has already financed billions of dollars of GPUs leased to Musk’s AI business through vehicles run by Valor Equity Partners. I went looking for those loans in SEC filings.
Turns out, those loans traveled. They sit in non-traded BDCs sold to individual investors, interval funds, listed BDCs and one listed ETF. One Apollo BDC sold to individuals holds $566.5 million.
So let’s follow the lease, the risk, and the money.
Following the AI-infrastructure money? Start here:
