AI Buildout Turns to Debt: Oracle, Broadcom and SpaceX Line Up Blockbuster Chip Financing

The race to build the world’s artificial intelligence infrastructure has entered a new and far more expensive phase. Three of the biggest names in American technology — Oracle, Broadcom and SpaceX — are lining up a series of blockbuster financing deals worth tens of billions of dollars each to pay for the computing hardware that powers AI, according to a Wall Street Journal report published on October 7.

The deals, which would be among the largest debt financings ever arranged for the AI buildout, signal a fundamental shift in how the industry’s most ambitious projects are funded. For years, the largest cloud companies paid for servers and chips mostly out of their own cash flow. That era appears to be over. The sheer cost of data-center construction — and the price of the AI chips inside them — has pushed even the deepest-pocketed buyers beyond the public bond market and into the arms of Wall Street’s private-credit giants.

Broadcom has spent recent weeks working to arrange more than $50 billion in financing for the custom AI chip it is developing together with OpenAI, according to people familiar with the discussions who spoke to the Journal. Apollo Global Management and Blackstone are among the lenders Broadcom has approached about taking part. The talks are still early and the final size of the deal could change, but people close to the situation told the Journal it is expected to close before the end of the year, and the package could pay for several gigawatts of OpenAI chip capacity.

The financing would follow a partnership the two companies announced a year ago to jointly develop 10 gigawatts of OpenAI’s custom chips using Broadcom’s networking technology, with deployment planned from the second half of 2026 through the end of 2029. The programme, known internally at OpenAI as Nexus, uses chip codenames drawn from types of peppers, with its first and second-generation chips called Jalapeño and Serrano, according to the Journal’s reporting.

Separately, Oracle is in discussions with Apollo and Goldman Sachs about funding a large chip purchase, people familiar with the matter told the Journal, and it also hopes to finalise a deal this year while still talking to several potential partners. The structure under discussion is revealing: rather than loading the debt directly onto its own balance sheet, Oracle would lease the chips over time from a separate company funded by investors to buy the hardware. The arrangement is designed to bridge the gap between paying for hardware now and collecting cloud revenue from it later — letting Oracle compete with larger, cash-rich rivals without adding more debt of its own. The Journal noted that Nvidia chips for a single 1-gigawatt data centre would cost tens of billions of dollars, though the number of chips in Oracle’s deal is unclear.

The third — and most striking — deal involves SpaceX. The company has spoken with lenders in recent days about a roughly $40 billion financing tied to Nvidia chips, according to a person familiar with the discussions, a story first reported by the Financial Times earlier this week. Bloomberg reported that Pacific Investment Management Co (PIMCO) is one of the investment managers examining the deal, and that Apollo Global Management is leading the financing, which is expected to close in 2027. According to the Financial Times, Musk’s AI, satellite and rocket conglomerate is seeking to raise about $10 billion in bank loans and $30 billion in investment-grade debt to pay for the chips.

SpaceX’s borrowing spree has already spooked the credit markets. Credit default insurance on SpaceX jumped to record highs after the reports, according to the Financial Times, while its shares and bonds lost ground. SpaceX shares erased gains in postmarket trading following the FT’s report, falling 1.2 per cent to $169.79, while Nvidia’s stock rose fractionally, Bloomberg reported.

The wave of deals reflects the mounting cost of building AI infrastructure, the Journal wrote. Cloud providers such as Amazon Web Services and Oracle traditionally financed computing hardware through their own cash flows. For their AI build-outs, the companies have issued hundreds of billions of dollars of bonds, pushing the public debt market to its limits. Now, some buyers are turning to Wall Street investment firms to help fund purchases totalling tens of billions of dollars per deal.

There is also a new group of chip buyers in the market — including OpenAI and Anthropic — who do not have the financial firepower to purchase their own hardware outright. Leading AI labs historically rented the bulk of their computing capacity from cloud providers, but they now want to own more of their own infrastructure to lower costs and reduce their reliance on other firms.

Broadcom’s financing push is not its only one. Just days earlier, Bloomberg reported that Broadcom’s Wall Street syndicate was starting to gather $60 billion of fresh AI chip financing to benefit Anthropic and other companies, in a separate effort.

The timing matters. Reuters reported on October 8 that strains in sovereign bond markets were being aggravated by exactly this kind of activity — major technology companies seeking to raise billions in debt in direct competition with governments for limited funding. A strong auction of US 10-year debt overnight helped pull yields off 24-year peaks, Reuters said, but the benchmark 10-year yield still stood at around 5.31 per cent, approaching levels last seen in 2002, while Brent crude climbed above $102 a barrel.

Analysis: Why It Matters

The most important sentence in this story may be the simplest: for years, the largest cloud companies paid for servers and chips mostly out of cash flow, and that is no longer sufficient. The AI buildout has crossed a threshold that every industrial boom eventually reaches — the point where the profits generated today cannot cover the capital required for tomorrow. What happens next is a question not just about technology but about finance.

Consider the arithmetic. A single 1-gigawatt data centre’s worth of Nvidia chips costs tens of billions of dollars, according to the Journal. The deals now being negotiated — $50 billion for Broadcom and OpenAI, $40 billion for SpaceX, plus Oracle’s separate arrangement and Broadcom’s parallel $60 billion Anthropic-linked effort — could add up to well over $150 billion in fresh debt financing, all for silicon. Add the hundreds of billions in bonds that cloud providers have already issued, and the industry is building an edifice of leverage that rivals the financing of a medium-sized country’s infrastructure programme.

This is where Nigel Green’s warning deserves attention. The chief executive of deVere Group told Reuters the buildout is creating a dangerous loop: Nvidia is effectively bankrolling the very customers who buy its products. Nvidia is a major shareholder in SpaceX, which is borrowing to buy Nvidia chips; Broadcom is raising money to build chips with OpenAI; Oracle is structuring leases for chips. If the profits from the AI boom fail to materialise on schedule, the loop runs in reverse — the lenders, the chip buyers and Nvidia itself are all exposed to the same downturn at the same time.

The Oracle structure is particularly worth watching. By leasing chips from a separate investor-funded entity rather than owning them outright, Oracle keeps the debt off its own balance sheet. This is old-fashioned equipment leasing applied to the most modern asset class on earth. It is clever finance — but it also shows how badly the industry wants to avoid the appearance of over-borrowing. When companies start engineering elaborate structures to keep debt hidden from their balance sheets, it is usually a sign that everyone involved senses the leverage is getting uncomfortable.

There is a broader collision happening too. Reuters reported that sovereign bond markets — where governments borrow — are being strained precisely because corporate borrowers are competing for the same limited pool of funding. France’s finances, the 24-year highs in US Treasury yields, the bond selloff hammering European banks: these are not separate stories. Money is finite, and the AI buildout is now consuming it on a scale that moves prices for everyone, including governments. The AI industry’s debt wave and the global bond selloff are the same phenomenon viewed from different ends of a telescope.

That said, the sceptics should not overstate the risk. There are crucial differences from past credit-fuelled manias. The underlying assets — AI data centres with contracted revenue from cloud customers — are productive infrastructure, not speculation on land or commodities. Oracle’s lease structure exists precisely to match payments to revenue. Apollo, Blackstone and Goldman Sachs are not in the business of funding dreams; they are lending against real, contracted cash flows. And SpaceX, whose credit-default swaps hit record highs this week, remains one of the most valuable companies in history, with revenue from rockets, satellites and now AI compute.

What to watch next is concrete. First, whether the Broadcom–OpenAI and Oracle deals close before year-end, as the Journal’s sources suggest — completion would validate the new private-credit model for AI infrastructure. Second, the terms: what interest rates these giants must pay will tell us how much risk the market thinks this buildout carries. Third, SpaceX’s deal, which runs longer (Bloomberg says Apollo’s financing is expected to close in 2027) and has already spooked credit markets. And fourth, the bond market itself: if sovereign and corporate borrowers keep colliding, central bankers — the Fed, the ECB, the Bank of England — will eventually be drawn into a conversation about whether the AI buildout is tightening financial conditions for everyone else.

The AI boom started on cash. It is increasingly running on credit. Credit changes the risk profile entirely — and that is true for the companies signing the deals, the lenders funding them, and the rest of us, who share the same bond markets.

Sources

• Wall Street Journal: https://www.wsj.com/tech/oracle-broadcom-and-spacex-seek-blockbuster-debt-deals-to-pay-for-ai-chips-848e8032
• Bloomberg via Moneyweb: https://www.moneyweb.co.za/news/tech/spacex-in-talks-to-borrow-40bn-to-buy-nvidia-chips/
• Reuters global markets: https://www.reuters.com/world/china/global-markets-global-markets-2026-10-08/
• Reuters Europe markets: https://www.reuters.com/markets/europe/european-shares-dip-banks-hit-over-3-month-low-oil-prices-weigh-2026-10-08/