THE NUMBER
$40 billion.
That is about how much principal SpaceX (SPCX) expects to pay over a new lease for AI chips. On Sunday, Elon Musk said SpaceX had closed $40 billion of debt for chips due early next year. Monday's filing is narrower. SpaceX has a binding commitment to enter a lease with an entity run by Apollo (APO). The lease still has closing conditions. Its rate is set at pricing.
Musk said closed. The filing says committed.
THE SETUP
- Stocks rose into Fed week. The S&P 500 closed up 0.7% and the Nasdaq 0.8%.
- Late Monday, Brent was near $115, down about 1% on the day.
- The Fed decides Wednesday. September's PCE prices come Thursday.
- Verizon (VZ) reported before the open. Microsoft (MSFT) and Alphabet (GOOGL) report Wednesday.
PREMIER FEATURE
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IN FOCUS
SpaceX Lined Up $40 Billion for AI Chips From Private Lenders. The Rate Is Not Set Yet.
On Sunday, Musk called the deal "primarily callable debt for GPU purchases." Monday's filing shows a lease. An Apollo-managed entity will buy the chips and lease them to SpaceX. SpaceX called it the largest committed GPU financing ever. Apollo and Goldman Sachs (GS) led it. Funds run by BlackRock (BLK) and Goldman Sachs Asset Management made anchor commitments. So did accounts advised by KKR (KKR).
The terms show what is still open. Each batch of chips gets its own schedule of about five years. Rent is paid each quarter at about one-twentieth of the cost, plus a fixed rate. That rate is set at pricing. SpaceX said the lease should close before year-end. Schedules start as chips arrive in the first half of next year.
For the lenders, the deal has a hard asset. The lessor owns the chips, and SpaceX rents them. The sum is about 2% of SpaceX's market value, the FM article noted. SpaceX shares closed little changed.
Musk also said many neoclouds face "guppy-level death." That is one rival's opinion, not a disclosure about any firm's finances.
A Commitment Is Not Yet a Price
The rate set at pricing would be the first public read on what private lenders charge to fund chips at this scale. Until then, the size is known and the cost is not.
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SIGNALS IN MOTION
SIGNAL 1: Surgery Partners Signed at $23.50, Above the Reported Price. Bain Keeps Its Stake.
This morning, PMD cited a report of about $20 a share. Bain had proposed $25.75 last year. On Monday, Surgery Partners (SGRY) signed for $23.50 in cash. The buyer is HealthSpan Partners, an affiliate of Bon Secours Mercy Health. The deal values the company at about $5.7 billion with debt.
Bain affiliates own about 39% and will roll their shares into the buyer, the company said. They agreed to vote for the deal. The price is about 49% above Friday's close. It is about 9% below Bain's bid last year. The stock closed at $23.25, just under the deal price.
WHAT RESOLVES THIS
The deal needs holder and regulatory approval. The company expects it to close in the first quarter of next year.
SIGNAL 2: Brazil's Bets Paid Out Sunday Night. Its U.S.-Listed Fund Closed Down Nearly 20%.
On Sunday afternoon, Polymarket and Kalshi both priced a Flávio Bolsonaro win near 82 cents. Lula won. Kalshi settled at No about an hour after the court's call, and Polymarket's contract resolved No late Sunday. Kalshi settled before Bolsonaro called for an annulment.
The trade took three weeks to build. After the first round, Brazilian stocks gained almost 7% and the real nearly 5%. On Monday, the main U.S.-listed Brazil fund (EWZ) closed down nearly 20%. It is priced in dollars, so its drop includes the real's.
WHAT RESOLVES THIS
One strategist named the finance minister pick as the first real read on fiscal policy. A formal challenge would test a result the venues have already paid out on.
SIGNAL 3: Strategy Bought No Bitcoin Last Week. Strive Bought 6,182.
On Oct. 19, PMD said a second week with more spent on preferred than on bitcoin would confirm a shift. Monday's filing did. Strategy (MSTR) said it bought no bitcoin from Oct. 19 to 25. It spent $204.9 million buying back its STRC preferred and sold no common stock.
Strive (ASST) went the other way. It bought 6,182 bitcoin and now holds 43,000. It also set up a program to sell up to $1 billion of a 15% preferred. Strategy closed down 4% and Strive 9%, while bitcoin was just under $80,000 late Monday.
WHAT RESOLVES THIS
Strategy's holders meet Wednesday, and it reports Thursday.
PARTNER SPOTLIGHT
Why Did Trump Just Ban America's Most Powerful AI?
It's not Nvidia. It's not OpenAI. It's not Google.
It's a San Francisco AI lab whose technology is used by eight of the ten largest companies in America — and which Bloomberg calls the highest-revenue AI company on earth.
Trump banned it from every federal agency and the Pentagon blacklisted it. The reason isn't what you think. Full details here.
THE CROSSOVER
Private Market Trends Driving Public Market Moves
Private money showed its hand on Monday. The prices come later.
SpaceX's lenders committed before setting a rate. Bain committed to stay before any vote. Alpha Dhabi's pledge still needs approvals. Brazil's contracts ran the other way. They paid out within hours, while a challenge to the vote is still possible. One reading is that private capital is still willing to sign but is leaving final terms for later. The rate on SpaceX's lease is likely to be the first of those terms made public.
On the calendar...
When |
Event |
Tue., Oct. 27 |
$70 billion five-year note sale; Israel's election |
Wed., Oct. 28 |
Fed decision; Strategy holder meeting; British budget; Microsoft and Alphabet report |
Thu., Oct. 29 |
Q3 GDP and September PCE prices; ECB decision; Coinbase, Strategy and Blue Owl report |
Fri., Oct. 30 |
Exxon Mobil and Chevron report |
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