Apollo Nvidia loan highlights surging AI chip demand and Musk xAI financing push

In a fresh sign of aggressive AI data center investment, an Apollo Nvidia loan is reportedly nearing completion to support an ambitious chip-leasing strategy tied to Elon Musk.

Apollo lines up multibillion-dollar financing for Nvidia hardware

A roughly $3.4 billion loan from Apollo Global Management is close to being finalized for an investment vehicle that will buy Nvidia chips and lease them to xAI, according to The Information report published on Feb 9. The outlet cited a person familiar with the matter, suggesting terms are at an advanced stage.

Under the structure, the vehicle would own the high-end processors while Elon Musk‘s AI startup pays to use them over time. However, the report did not disclose the loan’s interest rate, exact tenor or collateral package, leaving key details of the financing still unclear.

The Information also noted that Valor Equity Partners, a longtime backer of several Musk ventures, is arranging the deal between Apollo and the buying entity. Moreover, the investment could be formally wrapped up as soon as this week if negotiations stay on track.

Musk consolidates AI ambitions through SpaceX and xAI

Less than a week before news of the financing emerged, Musk announced that SpaceX had acquired the artificial intelligence company he also leads, in a transaction that reshapes the ownership structure of his ventures. The deal values the rocket and satellite group at $1 trillion and the AI business at $250 billion, according to his remarks.

That said, the combination ties Musk’s launch and satellite capabilities more closely to his AI initiatives, potentially giving xAI privileged access to data and infrastructure. It also places a substantial notional valuation on the emerging AI firm, signaling investor belief in its growth prospects despite intense competition from established players.

The reported apollo nvidia loan would align with Musk’s stated ambition to build large-scale AI infrastructure capable of training advanced models. However, stacking significant debt against specialized hardware could expose investors to swings in chip demand and future pricing for AI compute resources.

AI infrastructure boom drives record chip and data center spending

Big technology companies are expected to spend more than $600 billion in 2025 to acquire advanced chips and build massive data centers needed to train and deploy AI systems, the report said. Moreover, such outlays underline how critical access to high-performance processors has become in the current phase of the AI race.

In this environment, leasing structures for Nvidia chips allow new AI entrants and capital providers to share the burden of huge upfront hardware costs. However, they also introduce counterparty risk if startup clients fail to scale revenue fast enough to cover long-term lease obligations.

Deals like this echo older equipment-financing models used for aircraft or telecommunications infrastructure, but applied to cutting-edge AI accelerators. That said, the speed of technological change in chips may make recovery values less predictable than in traditional asset classes.

Key players stay silent as deal advances

The report said SpaceX, Apollo and xAI did not immediately respond to Reuters requests for comment on the prospective financing. Moreover, neither party has publicly confirmed the final size, timing or precise structure of the loan.

Market watchers will be looking for further disclosures on covenants, hardware ownership and any guarantees tied to Musk or his other companies. However, with Valor Equity Partners reportedly orchestrating the arrangement, participants appear comfortable pushing ahead despite the capital intensity and evolving regulatory environment around AI compute.

Overall, the prospective financing underscores how rapidly AI infrastructure is being capitalized, as investors race to secure Nvidia chips and position for long-term demand in advanced computing capacity.