The Zhitong Finance App learned that Goldman Sachs (GS.US) and Apollo Global Management (APO.US) are in talks with Wall Street investors to begin selling part of SpaceX (SPCX.US)'s approximately $40 billion chip financing deal. Meanwhile, after the Democratic Party's overwhelming victory, AI deals are facing turmoil.
According to people familiar with the matter, the two companies have begun to reach out to potential buyers of this multi-stage financing. SpaceX has said that the deal structure aims to keep debt off SpaceX's balance sheet and is the largest GPU financing arrangement on record.
People familiar with the matter said that in some cases, investors are required to purchase shares of up to 500 million US dollars before the official syndicated distribution process begins in order to complete the transaction as soon as possible. The syndicated distribution program was launched soon.
The political landscape changes abruptly, and AI transactions are facing a test
SpaceX, a rocket, satellite and AI company owned by Elon Musk, announced the financing deal in October, and investors agreed to the package before pricing.
This exposed lenders to market risk during turbulent times. Investors have retreated from AI deals, questioning whether revenue can ultimately justify the astonishing spending; this sentiment has made lenders wary of some of SpaceX's new cloud service competitors, including CoreWeave (CRWV.US).
The Democratic Party took control of the National Assembly after the midterm elections, further exacerbating these pressures. Democrats used voters' concerns about rising living costs and war in Iran to win the election. Data centers have also been the focus of intense elections, particularly in Texas — a state that turned blue just a few months after freezing approval for new projects.
As the political landscape changed overnight, the market reacted violently, and SpaceX and Tesla (TSLA.US) shares declined. SpaceX's data center is located in Memphis, Tennessee, and additional sites are being developed in Mississippi.
Debts are not recorded, but rent obligations are not exempt
According to reports, in this $40 billion deal, a special purpose carrier managed by Apollo-backed Atlas SP will buy Nvidia (NVDA.US) chips and issue debt to lenders. Through this structure, SpaceX can protect its company's credit rating.
The presentation shows that SpaceX will rent these chips through a five-year agreement without providing a residual value guarantee or other promises that technology companies usually make to obtain financing. “SpaceX's obligation to pay rent is absolute,” the presentation said.
Crucially, documents show that SpaceX cannot invoke force majeure clauses to suspend payments, in contrast to companies such as Oracle (ORCL.US). Earlier, it was reported that Oracle had invoked force majeure in an attempt to delay its data center obligations.
The document said, “Rent must be paid regardless of equipment condition, accident, or force majeure event, which provides investors with a clear way to understand SpaceX's credit status. ”
According to people familiar with the matter, the debt is divided into multiple tiers, including $8.3 billion senior guarantee loans to be distributed to bank syndicates and multi-tier bonds to be sold to asset management companies. People familiar with the matter said that Goldman Sachs is leading the loan section, and Apollo is a key investor in bonds. Pacific Investment Management also participated in the deal.
According to the documents, the debt plan, along with a $7 billion lease advance payment, will be used to pay around $47.3 billion for graphics processor equipment, Nvidia's latest Rubin chip. The chips will be delivered in the first half of 2027.