SpaceX reportedly seeks $40 billion in debt to buy Nvidia chips | The 8:30

Uh Bloomberg reporting today that SpaceX is looking to issue 40 billion uh in new debt to buy Nvidia chips for data centers. Uh the split will be 10 billion in bank loans and 30 billion in investment grade debt uh per per bloomer and with PIMCO looking at the deal and our parent Apollo leading the financing. So again this unending desire need for debt probably going to be satisfied. I don't know they're saying looking at a 2027 sort of uh date to complete this. I mean, >> how do we feel about this? >> It's a lot of money. >> I mean, as somebody joked online, why doesn't Nvidia just lend them money like they did? [laughter] You know, they've been doing they've been doing deals like that, right? Right. >> Um, you know, it just again shows the scope of I mean, you know, it's like what what's today? It's a Oh, it's a Wednesday. Uh, SpaceX is trying to raise >> Oh, 40 billion, >> but it but this is this has become routine, which is extraordinary. And I know I want you to bring up that FT thing real quick, but before that, you know, Mus talking about how, you know, we're going to basically add a ton more of Nvidia chipster colossus too, right? >> And if you're able to, >> you know, on a client byclient basis, 1.5, one billion, one every month in compute, you're oh, this is not maybe this is not that big of a bad of an investment in the debt, right? It's like they're clearly clearly monetizing the AI compute that they have. Not maybe not the highest numbers, but uh that's a positive, but there's also, you know, that funny thing that's mentioned in the in the perspectus for this debt deal. Did you see this thing? >> No, maybe not. >> Oh, the FT basically has a has a little snapshot with a an a fund guy talking about it's a two-page document with like we're going to put >> Yes, I did see this. I did >> bees and the stars pointing with an arrow pointing up [laughter] where the chips are going and the guy's like >> there's not much detail. >> It's like it's like a a child's picture book. >> The source is like how can I show this to my investment committee? I can't. this is not something I can use to short it, you know? So, it's that flip side of it. This isn't a real PowerPoint, >> right? >> So, they're they're seeking to raise this money. We'll see what it actually looks like when they do raise this money, right? >> And of course, this raises the question and it's a report, >> but all of this stuff raises, which is okay. So, >> Musk has said Colossus 2, which is the one in what, Tennessee? >> Yeah. >> Has 110,000 Nvidia GB200 chips. That's the Grace Blackwell. 440,000 Grace Blackwell 300s. Then they're bringing online another 220,000 uh Grace Blackwell 300s and then another 220,000 expected in November. In other words, like this is an enormous a colossal amount of compute, >> colossal amount of chips. >> Is that compute being used? >> And we will and will it generate revenue? all of those things, you know, those and that's the question over and over again for all of these data centers like >> when does the demand >> start to meet the supply? >> Yeah. I also want to step back just for a second. I'm going to sound like a broken record here because I'm going to keep saying it. >> Is it the duck again? >> It's not the duck. [laughter] >> It's not the duck. I promise. >> The Treasury is planning to auction $39 billion of 10ear notes today. Tomorrow they're trying to auction $22 billion of 30-year bonds. SpaceX is looking for $40 billion. Broadcom is working on a $60 billion chip financing deal. Look at the competition for capital. If you're in the high-grade space, where do I put my money? That's becoming a real question and a real problem that we're all going to have to confront of, okay, if you want money AI, and you need money treasury, and you need money somewhere else, at some point there's a finite money supply. So what does that do to where the funding actually ends up going and where the weaknesses show up because there's not capital available >> especially at a time when we're seeing tightening >> right also when anthropic IPOs I personally will not be >> demand on capital [clears throat] >> right well I will not be surprised if they do what SpaceX did 10 days after SpaceX IPOs what do they do they go issue and try to raise more debt >> right >> I I think you can see the same thing out of anthropic >> right right >> um one other interesting note today that you flagged pros is that even as they're building out all of this enormous amount of compute, Elon Musk came out with an update about its Grock bot, not to being confused with its Grock >> LLM. This is its actual agent. >> That the Grock bot won't necessarily run on Grock. >> Yes, >> they really need to rename one of these things. >> Also, isn't there's also there's Nvidia Grock. Like there are several Grock >> with a Q. At least that's spelled differently, >> right? But it's pronounced the same. >> Correct. Okay. So he basically said this morning that SpaceX is going to use the best backend model for any given task. He says that includes claude opus 5 and a half midjourney other leading APIs. So like he's saying we're not going to use our own LLM >> potentially. Yeah. Yeah. Yeah. And you know like when you use stuff like Claude and it's using plugins, it's using other companies plugins. So, it's not that, you know, that's fine, but this seems like it's even more of a bigger deal because it's using the foundational models like Claude as opposed to just little plugins to accomplish these tasks. And he say what he said, whatever is most likely to give you the best outcome, we will do. That's obviously not, >> you know, in in stark relief to what what chat GBT is doing, what Claude is doing. So, this is sort of saying we're open, we're open, we're open, you know, and then we complaints about I don't want I don't want Grock to be using other anthropic. I don't trust >> I don't want it running on Claude or something. Yeah. >> And Musk has always been I'm open guy but only when he wants to be an open guy. Right. So it's it's sort of like how long does this last? What does that mean? Are certain partners excluded? You know is like Gemini excluded? I don't know. You know um he hates Altman, >> right? So will they not use open? >> Exactly. Exactly. So it's not it's not always to be to be clear the best outcome. Right. We'll see. But very interesting nonetheless note today that that he issued >> and we'll see what that looks like going forward. And then there's also news in like the Musk ecosystem with Terra Fab, right? Is that he says >> he he's you know he's been tweet like most of what he tweets is not of use to us from an investment perspective >> and much of it is not gospel from a I could actually get you know have exposure for this. >> He tweeted he tweeted about TSMC >> right? So there was reports that TSMC will be part of the Terra Fab deal and then we were talking about >> is there is there sort of concern that TSMC will run the actual FAB itself? is it going to be their sort of operation and then you know SpaceX has a little piece of it. He said no we will run the fab let there be no doubt about that maybe TSMC subleas is part of the terab if they want now this is also kind of the intel inside right because it was a big deal with they're having with Intel was Intel being shunned no actually they're they're still part of it TSMC might be part of it too so >> but again it's what you said he's just like spouting off responses that are just not probably not cleared through any kind of comms through any kind of PR like just this is what's happening >> and material in some cases >> very material and moving the stock right >> yeah that stock's down 2% >> and then what happens when an an actual official confirmation comes out no more Intel sorry we're going to go TSMC you know stuff like that it just sort of >> well the stock is moving more this morning I would say on that Bloomberg report about raise >> right >> than on the but you know Intel moved right >> and we've seen those two stocks Intel and Taiwan semi kind of whiplash in the last few days as it looked like this was going to go one way then says it goes the other way it gets to the point his uh exposts swing markets and that's going, you know, that's a liability.