SpaceX strikes AI chip lease deal as Musk warns rivals

SpaceX secured a five-year lease agreement for advanced AI chips with private equity firm Apollo Global Management, according to a filing with the U.S. Securities and Exchange Commission. The contract, worth approximately $40 billion plus interest and fees, pertains to Nvidia's advanced GPUs designed for generative AI models. These powerful chips, called Vera Rubin GPUs, will be gradually delivered to SpaceX starting in the first half of 2027.

The deal comes in the wake of SpaceX absorbing xAI, the AI company responsible for constructing two massive data centers in Memphis, Tennessee, in just two years. These data centers, known as Colossus 1 and 2, house hundreds of thousands of GPUs, which are crucial for developing and running large AI models. Apollo had previously supported SpaceX's AI ambitions by leading a $3.5 billion financing package that enabled the investment fund to purchase and lease Nvidia chips to xAI for use in Colossus 2.

SpaceX has also leased computing capacity to companies like Anthropic, the creator of the Claude chatbot, and Google, with these partnerships contributing significantly to the company's revenue. In a recent tweet on X, Elon Musk emphasized the significance of this deal, stating that debt markets have largely restricted access to funding for companies lacking substantial revenue independent of AI data centers.

Musk characterized the GPU agreement as evidence of investor confidence in SpaceX, contrasting it with the challenges faced by newer cloud market entrants such as CoreWeave or Nebius. He warned that many of these neoclouds may experience significant challenges and consolidation in the future.