Elon Musk’s SpaceX is in talks with banks and investors to raise $40 billion to buy chips from Nvidia Corp, people familiar with the matter said, in what would be among the biggest-ever debt financings for the AI buildout.

Pacific Investment Management Co is one of the investment managers looking at the deal, according to 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. Broadcom Inc’s Wall Street syndicate is starting to gather $60 billion of fresh AI chip financing to benefit Anthropic PBC and other companies, people familiar with the matter said just days ago.  

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 percent in US postmarket trading to $169.79. Nvidia’s stock rose fractionally.

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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.

Apollo has struck other deals with Elon Musk’s companies, including a $7 billion financing for xAI for access to Nvidia. The debt was earmarked for a special purpose vehicle to help Musk’s startup rent chips for its Colossus 2 data center site in Memphis.