SpaceX Wants $40 Billion in New Debt, and It'll Need Hundreds of Billions More to Achieve Musk's Vision

Space Exploration Technologies (NASDAQ: SPCX) raised $86 billion with its IPO. It then tapped the debt market for another $25 billion. Now, it's looking to get another $40 billion in financing to pursue its massive artificial intelligence (AI) build-out.

Elon Musk's company reportedly reached out to Apollo Global Management and several banks to help it purchase $40 billion worth of Nvidia (NASDAQ: NVDA) GPUs. But Musk could be just getting started. SpaceX still needs a colossal amount of capital to achieve the CEO's vision.

Here's what that means for investors.

Image source: The Motley Fool.

SpaceX needs a ton of capital to build its business

SpaceX generated $12.5 billion of revenue in the first six months of 2026 while capital expenditures climbed to $28.5 billion. The vast majority of that capex is tied to its AI infrastructure build-out.

SpaceX has made a huge bet on artificial intelligence as the future of the business. It acquired Musk's xAI at the start of the year and plans to develop orbital data centers. In the meantime, it's building plain-old terrestrial data centers full of Nvidia GPUs.

Management said it ended the second quarter with 1.4 gigawatts of compute capacity. Musk said he expects SpaceX to end the year with over 2 gigawatts of compute during the company's second-quarter earnings call. For 2027, Musk said its capacity could "be closer to 10 gigawatts of compute than 5 gigawatts of compute."

To put that in perspective, Amazon had just over 10 gigawatts of compute deployed as of June, according to Jefferies data. Microsoft and Alphabet had just over 5 gigawatts. That said, all three expect to have huge amounts coming online over the next couple of years.

Nvidia estimates the cost of deploying its chips is about $60 billion per gigawatt. To go from 2 gigawatts to 10 gigawatts in 2027 will cost SpaceX around $480 billion in capital expenditures. And that's just for data center builds. SpaceX is also working to get its Starship fully reusable rocket ready to launch multiple times per week. It's also continuing to deploy Starlink satellites and buying radio spectrum licenses to expand its internet service with a direct-to-mobile service.

Morgan Stanley analyst Adam Jonas wrote in his initial note on SpaceX that it would require an average of $84 billion in external capital per year through 2034 before it started producing positive cash flow. That's $672 billion total. Musk is apparently planning to front-load those capital needs, and that creates a huge risk for investors.

Will massive AI spending pay off for SpaceX?

SpaceX's plans to rapidly build new data centers could take advantage of the current tight supply of AI compute. Few other companies are in a position to raise so much capital and build enough capacity to serve the needs of leading AI labs and developers. SpaceX has been able to charge premium prices for its existing infrastructure thanks to the massive amount of overflow from hyperscalers.

However, it's unclear whether it will be able to charge such premium prices going forward, as it brings on huge amounts of capacity alongside the big hyperscalers. While Musk said it's charging $30 to $50 per watt on an annualized basis, that number could quickly decline, extending the payback period.

What's more, one of the reasons SpaceX has been able to charge such a high premium is that it includes terms in its contracts that allow either party to cancel the agreement with 90 days' notice. That leaves its existing contracts extremely susceptible to market forces. In other words, SpaceX is betting that demand for compute continues to at least keep pace with compute capacity. That's a very big ask considering the size of its planned build-out.

As such, investors should discount the return on invested capital SpaceX will receive from its AI spending. Meanwhile, they need to be mindful of the rising cost of capital. And if debt markets can't support SpaceX's spending plans, the cost of capital could take the form of new equity issues, diluting the value of existing shares. There are significant risks in SpaceX, but the premium stock price doesn't reflect the potential downside.

Adam Levy has positions in Alphabet, Amazon, and Microsoft. The Motley Fool has positions in and recommends Alphabet, Amazon, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.