SpaceX strikes AI chip lease deal as Musk warns rivals

SpaceX said Monday it has struck a deal with private equity giant Apollo Global Management to lease specialised chips for developing artificial intelligence.

The contract, which has yet to be finalised, runs for about five years and is worth roughly US$40 billion, plus interest and certain fees, Elon Musk’s company said in a filing with the US Securities and Exchange Commission.

Apollo will buy the graphics processing units (GPUs), considered the most powerful chips for building generative AI models.

The chips are Nvidia’s Vera Rubin GPUs, which Nvidia began rolling out in the second half of this year. Apollo is to make the processors available gradually starting in the first half of 2027.

xAI, Musk’s AI company that was absorbed by SpaceX in February, built two massive data centres in Memphis, Tennessee, Colossus 1 and 2, in just two years. Together they house several hundred thousand GPUs.

These data centres and the chips they run, known as cloud infrastructure, are essential for developing and running large AI models.

Apollo has already helped finance Musk’s AI ambitions. In January, it led a US$3.5 billion financing package that allowed an investment fund to buy Nvidia chips and lease them to xAI for Colossus 2.

SpaceX also rents out computing capacity to Anthropic, the maker of the Claude chatbot, and to Google, deals that have become a major source of revenue for the company.

SpaceX is currently expanding Colossus 2, whose computing power should more than double by the end of the year compared with the end of September, according to Musk.

Musk previewed the deal Sunday on X, saying debt markets “have almost entirely shut off access to money for any company that doesn’t have substantial revenue independent of AI data centres.”

He presented the GPU agreement as proof of investor confidence in SpaceX, in contrast to newcomers to the cloud market, so-called “neoclouds” such as CoreWeave or Nebius.

“The 200+ neoclouds are going to see guppy-level death and consolidation,” Musk wrote. “Some will make it through, but not many.”

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