Feb 9 (Reuters) – Apollo Global Management is close to finalizing a roughly $3.4 billion loan to an investment vehicle that plans to buy Nvidia chips and lease them to Elon Musk’s xAI, The Information reported on Monday, citing a person familiar with the matter.
Less than a week ago, Musk announced that SpaceX acquired the artificial intelligence company he also leads in a deal that values the rocket and satellite company at $1 trillion and the AI outfit at $250 billion.
Musk has said the rationale behind combining SpaceX and xAI is partly to advance the development of orbital data centers, which could use space-based infrastructure to support next-generation AI computing.
Big tech companies are expected to spend more than $600 billion this year to buy advanced chips and build out massive data centers needed to deploy and train AI systems.
The investment could be finalized as soon as this week and Valor Equity Partners, a longtime investor in Musk’s companies, is arranging the deal, the report said.
SpaceX, Nvidia and xAI did not immediately respond to Reuters’ requests for comment, while Apollo declined to comment.
Leasing chips and compute infrastructure allows AI startups such as xAI to scale rapidly while preserving capital that would otherwise be tied up in costly hardware purchases.
The transaction would mark Apollo’s second major investment in a vehicle that leases chips to xAI, following a similar $3.5 billion loan made in November.
Apollo said on Saturday its funds led $3.5 billion in financing for a roughly $5.4 billion data-center compute deal arranged by Valor Equity Partners to lease high-performance hardware to xAI.
The financing, structured as a triple-net lease to support one of the world’s largest compute clusters for AI model training, also includes Nvidia as an anchor investor in the vehicle.
(Reporting by Akash Sriram in Bengaluru; Editing by Arun Koyyur)
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