SpaceX to send Nvidia chips ‘somewhere in the universe’
SpaceX, the world’s greatest rocketry, AI, and social media company, claimed in its IPO prospectus in June that it had a total addressable market of $28.5 trillion — mostly in AI. So the company is borrowing $40 billion to buy yet more Nvidia chips. [FT] Why should you lend SpaceX money? You don’t…
Annons
Annons
SpaceX, the world’s greatest rocketry, AI, and social media company, claimed in its IPO prospectus in June that it had a total addressable market of $28.5 trillion — mostly in AI. So the company is borrowing $40 billion to buy yet more Nvidia chips. [FT] Why should you lend SpaceX money? You don’t need disclosures — Elon Musk is just cool, you don’t need any other reason. This is what Elon sent around for the previous funding round: Investors whom SpaceX has previously approached about financing its multibillion-dollar chip purchase said they only received a short two-page deal memo with pictures of outer space and an arrow pointing out that the company was going to build data centres “somewhere in the universe”. It’s not clear the Nvidia chips that SpaceX buys will actually go to the moon. Data centres in space are still stupid. And South Memphis is in the universe, so I think SpaceX will be renting these chips to Anthropic and Google, like now. SpaceX is pushing it on the borrowing. This new $40 billion bond comes after borrowing $25 billion in June, straight after raising $86 billion in the IPO. SpaceX’s credit rating is BBB, the second lowest credit rating that’s still investor grade. So the pension funds could buy the debt. If they wanted to. Not everyone is convinced. The price of SpaceX credit default swaps — insurance against SpaceX defaulting on the bonds — has jumped from 1.1% to 1.94%. Investors are also selling off the bonds. [FT] Adam Jonas from Morgan Stanley said in an analyst note that investors really weren’t buying it. Literally: [Twitter, archive] I regularly present to large groups of clients and ask the room: “Who here owns $SPCX shares?” Last night, when I did that in front of 40 clients, not a single hand went up. Sometimes it’s 1 or 2 hands. Rarely more. SpaceX stock has recovered to its IPO price. But the stock market looks at upside possibilities. The credit market looks at risk. SpaceX is also pivoting from space. Or from doing launches for others and not just themselves: [FT, archive] SpaceX has stopped bidding for commercial Falcon 9 launches, allowing only US government customers for the rocket. And Gwynne Shotwell signalled last week in Paris that Crew Dragon, the only operational crew vehicle for routine missions for Nasa, will eventually be wound down. Crew certification for the new Starship rocket is years out, and its manifest is overwhelmingly for its own Starlink and orbital AI use. SpaceX is still sending up lots of rockets. But those will increasingly be for their own satellites, like Starlink. Though probably not for ‘orbital AI.’ Because data centres in space are still stupid. President Trump announced in September that everyone should rename AI to SI — super intelligence. Elon Musk has, of course, tweeted in agreement: [Twitter, archive] Musk: No more AI. SI. It’s better reply: Any possibility of renaming to SpaceXSI?? Musk: Yes, we will make that change There’s been no official change yet. But saying “SI” is the happening signal for AI executives to make if they want to keep nice with the present administration. Video — Podcast