Musk's $40 billion chip loan puts debt at the heart of AI

Elon Musk disclosed on X that SpaceX has arranged $40 billion in financing to buy graphics processing units, pointing to the company's investment-grade ratings and the cash thrown off by Starlink and launches as reasons lenders should be comfortable, TradingView reported. The arithmetic is less comforting than the pitch. SpaceX took in $14.58 billion of revenue in the third quarter, a 161% increase, with its AI unit at $7.56 billion. A borrowing commitment nearly three times a quarter's sales is a bet that demand for computing keeps compounding toward Musk's stated goal of $1 trillion in annual revenue by 2030.

The same week supplied a caution. Nokia's operating profit climbed 35% and its shares still fell more than 10%, because investors doubted the Finnish company could convert AI orders into revenue given supply constraints and costs. Rosenblatt trimmed its target price to $14 from $15 while keeping a buy rating. Netflix matched expectations at $12.9 billion in third-quarter revenue, guided lower for the fourth quarter and dropped 6%.

Meanwhile Tesla's capital spending doubled to $4.7 billion, and BNP Paribas lifted the stock to neutral with a $420 target largely because SpaceX might buy it. Both boards have formed independent committees. Valuing one Musk company on the possibility of rescue by another is not analysis; it is circular reasoning dressed as a forecast.

This story was first reported by TradingView.