Capital · United States

SpaceX in talks to borrow $40 billion to buy Nvidia chips

Credited to The Hindu BusinessLine · thehindubusinessline.com · 2d ago

Photograph · The Hindu BusinessLine

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Tech companies and AI model developers are investing and borrowing hundreds of billions of dollars to build and lease giant data centers full of chips to power AI systems

By Bloomberg

Elon Musk’s SpaceX is in talks with banks and investors to raise $40 billion of debt to buy chips from Nvidia Corp., people familiar with the matter said, underscoring the insatiable demand among AI developers for more computing power.

Pacific Investment Management Co. is one of the investment managers looking at the deal, said the people, who spoke on condition of anonymity as the talks are private. SpaceX’s fundraising discussions are in an early stage and could end without a deal being completed, they said.

Musk’s AI, satellite and rocket conglomerate is seeking to raise about $10 billion in bank loans and $30 billion in investment-grade debt to pay for the chips, the Financial Times reported earlier, citing unnamed sources familiar with the matter.

Apollo Global Management Inc. is leading the financing, in a deal that is expected to close in 2027, the newspaper said.

Tech companies and AI model developers are investing and borrowing hundreds of billions of dollars to build and lease giant data centers full of chips to power AI systems.

The worldwide expansion of computing capacity has sent the cost of everything from land to chips and power-generation equipment soaring, touching off a series of massive financing deals.

Nvidia, SpaceX and Apollo didn’t immediately respond to requests for comment. SpaceX shares erased gains in postmarket trading following the FT’s report, falling 1.2 per cent in US postmarket trading to $169.79. Nvidia’s stock rose fractionally.

Just last month, Musk said Colossus 2, an AI computing cluster built by his xAI business, may more than double its current Nvidia chip count by the end of the year. It was the most detailed timetable that the trillionaire has given yet for expansion plans for the Memphis-area cluster.

Colossus 2 now has 110,000 Nvidia GB200 chips and 440,000 GB300s, Musk said in a post on X. A further 220,000 GB300s are due to be operational next week, with another 220,000 expected in November, he said. An additional 220,000 may come online late December “if we get lucky,” he said.

Musk’s xAI has recruited multiple Wall Street firms to test its Grok chatbot, including Apollo and Morgan Stanley.

Apollo was among the US investment giants that Nvidia tapped for a high-profile partnership in August to source $500 billion in financing for AI infrastructure.

The coalition — which also includes Blackstone Inc., BlackRock Inc., Brookfield Asset Management, Goldman Sachs Group Inc. and KKR & Co. — said at the time that they’d “create dedicated pools of capital at significant scale at attractive rates for Nvidia customers.”

Executives indicated that it will focus on debt financing to provide access to compute for Nvidia’s largest customers and signaled that there were already many deals in the works that would qualify toward this commitment.

More stories like this are available on bloomberg.com

CapitalUnited States

Nvidia-Backed IPO’s Cratering Demand Sends Warning on AI Funding

Credited to Bloomberg$ · bloomberg.com7h ago

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The sudden plunge in demand for an Nvidia-backed data center company’s initial public offering is revealing fresh cracks in the AI funding boom.

View the article · $Bloomberg

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Capital · United States

Ripple is earning fees financing leveraged stock bets, a business long run by banks

Credited to CoinDesk · coindesk.com · 11h ago

Photograph · CoinDesk

The crypto company's $1.25 billion acquisition of Hidden Road has opened a corner of Wall Street where funds pay to amplify daily moves in stocks such as Nvidia and Sandisk.

Ripple is expanding into the business of financing leveraged stock exchange-traded funds, putting the crypto company in a market long dominated by major banks and securities firms.

Its prime brokerage division, Ripple Prime, is supplying financing for funds that let investors multiply the daily moves of individual stocks and market indexes, according to a Wall Street Journal report Wednesday.

Ripple entered the business through its $1.25 billion acquisition of Hidden Road, a multi-asset prime brokerage firm, in October 2025. The deal gave Ripple an established operation that clears trades, finances investment positions and handles transactions across stocks, bonds, currencies and digital assets.

A fund promising twice the daily return of Nvidia can enter into a financial contract called a total return swap rather than buying twice its assets in Nvidia shares. A broker provides the exposure, typically hedging its own risk through stock purchases or other trades, while collecting a financing fee from the fund.

The Journal reported that the Tradr 2X Long SNDK Daily ETF, which targets twice the daily movement of memory-chip maker Sandisk, pays Ripple the overnight bank funding rate — a benchmark for what banks pay to borrow overnight — plus four percentage points.

That puts the annualized financing rate at roughly 8% at prevailing rates, charged on the swap exposure and separate from the ETF's management fee.

The U.S. market now has 593 leveraged ETFs holding more than $256 billion, including 426 funds tracking individual stocks, according to Morningstar Direct data.

Banks have traditionally supplied much of this financing, but tighter capital and risk requirements have created openings for nonbank firms including Ripple Prime, Jane Street and Clear Street.

Ripple launched its Delta One business in August, offering total return swaps tied to U.S. stocks, market indexes and digital assets. It said at the time the operation had more than $1 billion in regulatory net capital, and it had completed a $275 million senior debt offering to help finance further growth.

Meanwhile, the company announced an expanded agreement on Tuesday with hedge fund manager Brevan Howard, under which Ripple Prime will provide brokerage, clearing and financing services across multiple asset classes.

Leveraged ETFs reset their exposure daily, and sharp moves in individual stocks can leave financing firms exposed if a fund's assets are insufficient to cover losses.

The business gives Ripple fee income tied to stock trading and institutional financing. As such, the company has still not disclosed how much revenue its leveraged ETF financing generates or how much of that activity uses XRP or the XRP Ledger.

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