SpaceX’s US$40b Nvidia chip deal exposes AI’s money loop

SpaceX’s talks to borrow US$40 billion (over N$667 billion) to buy Nvidia chips lay bare a dangerous loop at the heart of the AI boom, with the industry’s biggest supplier bankrolling the very customers who buy its products and global investors left carrying the risk, warns the CEO of deVere Group, one of the world’s largest independent financial advisories.

The comments from the CEO of deVere Group, Nigel Green, come as Elon Musk’s rocket and AI conglomerate reportedly seeks around US$10 billion in bank loans and US$30 billion in investment-grade debt, in what would rank among the biggest debt financings of the entire AI buildout, while a separate Wall Street syndicate gathers a further US$60 billion of AI chip financing.

“Follow the money here and it comes straight back to where it started. Nvidia owns a sizeable stake in SpaceX”, said Green, adding: “SpaceX has committed to building exclusively on Nvidia’s chips. And Nvidia is helping to assemble the financing pools that lend its customers the cash to pay for them. Every dollar in that loop gets counted as growth somewhere.

Once you strip out the circular flows, the true level of independent demand becomes far harder to measure.”

Filings show Nvidia holds just under 123 million SpaceX shares, worth close to US$21 billion at the end of June. Since 2024, the chipmaker has pledged more than US$100 billion to AI companies, and it’s assembling a Wall Street consortium to provide over US$500 billion in financing for its own customers, partially guaranteeing loans backed by the value of its chips.

SpaceX, meanwhile, lost US$4.28 billion in the first quarter of this year on revenue of US$4.69 billion.

“When a supplier guarantees the loans, its customers use to buy its products, and those loans are secured against the same products, everything rests on chip values holding up,” notes the deVere CEO.

“If the next generation of hardware makes today’s chips obsolete faster than expected, the collateral, the earnings and the equity stakes all lose value at the same time.”

Green’s comments come as global big tech is on course to spend roughly US$700 billion on capital projects this year, with around three quarters going into AI infrastructure.

*– newsroom@nepc.com.na *

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