Apollo buys the GPUs, SpaceX pays over five years

Space Exploration Technologies Corp., listed on Nasdaq as SPCX, has told the SEC how it plans to pay for a large block of AI hardware without buying it. In a Form 8-K filed on 26 October, the company says that on 24 October it entered into a binding commitment letter for a master finance lease with an entity managed by Apollo Global Management. The lessor will acquire graphics processing unit pods and related equipment and lease them to SpaceX for use at data centres the company selects.

The scale sits in one sentence. SpaceX expects aggregate principal payments under the lease schedules to total approximately $40 billion over their terms. The equipment will arrive in tranches, each under its own lease schedule running roughly five to five and a quarter years from its commencement date. The schedules are expected to begin in the first half of 2027, as the GPUs are delivered, and the master lease is expected to close before the end of this year, subject to specified closing conditions.

The rent formula shows what kind of deal this is. Rent is paid quarterly in advance and generally consists of one-twentieth of the financed cost of the tranche, plus an amount at a fixed annual rate on the outstanding balance and certain ongoing costs. Twenty quarterly instalments of one-twentieth repay the financed cost in five years, which matches the term: SpaceX pays for each tranche while it uses it instead of up front, and the Apollo-managed lessor finances the purchase. The fixed rate is not yet known; it will be set at pricing, before the master lease is signed.

Two cautions apply. A commitment letter is not the lease itself, and the filing's forward-looking statements name the risk that the transaction may not close on the anticipated terms or timeline, or at all, and that deliveries, lease terms or total principal may differ from current expectations. The filing also does not say which GPUs, how many pods or which data centres; the $40 billion figure is the only measure of size it gives.