Apollo Global Management is close to finalising a $3.4 billion loan to an investment vehicle that plans to buy NVIDIA chips and lease them to xAI, according to industry reports.
The deal could be completed as early as this week and is being arranged by Valor Equity Partners, a long-time backer of Elon Musk’s businesses.
However, Apollo declined to comment on the report, while xAI, Nvidia, and SpaceX did not respond to requests for comment.
Combining SpaceX and xAI
The move comes shortly after Musk announced a deal combining SpaceX and xAI, valuing SpaceX at $1 trillion and xAI at $250 billion. The combination is aimed at accelerating work on orbital data centres, which could use space-based infrastructure to support future AI computing.
Leasing chips instead of buying them outright allows AI companies like xAI to scale quickly without tying up large amounts of capital in expensive hardware, adds Reuters.
Big technology firms are expected to spend more than $600 billion this year on advanced chips and data centres to support AI development.
This would be Apollo’s second major investment tied to chip leasing for xAI. In November, Apollo-backed funds provided a $3.5 billion loan for a similar structure to support one of the world’s largest AI compute clusters.
That earlier financing was also arranged by Valor Equity Partners and included Nvidia as a key investor in the vehicle.
