Meta, SpaceX Detail New Financing Plans as Capital Squeeze Hits AI Industry

Last we checked, Coreweave doesn’t manufacture rockets or dominate the advertising industry. It’s just a data center, which makes it a guppy according to Elon Musk. 

Over the weekend, the CEO of SpaceX declared on X that “debt markets have almost entirely shut off access to money for any company that doesn’t have substantial revenue independent of AI data centers.” For SpaceX, that means securing a new $40 billion debt financing deal for GPUs (Meta, meanwhile, gave more details of a $95 billion AI financing plan of its own on Monday). As for the neoclouds? Musk predicts some “200+ … are going to see guppy-level death and consolidation.”

Debt Crunch

There’s a reason all those guppies seem to be flopping around in a smaller and smaller capital puddle. US corporations have issued $1.76 trillion worth of investment-grade bonds this year as of Monday, according to data compiled by Bloomberg. That supplants 2020’s record $1.75 trillion in borrowing, a debt spree sparked by pandemic necessity and ultra-low interest rates. 

The AI industry has raised $300 billion in high-grade debt so far this year, per Bloomberg, already roughly triple the amount raised through all of 2025, and it’s not even Halloween yet. Still, Musk (whose SpaceX does plenty of business renting out compute space and just might own a guppy net, for what it’s worth), is hardly alone in seeing a growing divide between AI’s little fish and big sharks. In a note to clients on Monday, Morgan Stanley analysts said that higher borrowing costs are bifurcating the industry by credit quality, with four major hyperscalers (Amazon, Alphabet, Meta and Microsoft) standing as those that can withstand higher borrowing costs. Wall Street is seeing red flags everywhere else:

• Investors bought more than $9 billion worth of credit default swaps per week in September on bonds linked to Amazon, Alphabet, Meta, Nvidia, Broadcom, SpaceX and Oracle, according to Morgan Stanley Research data. That was up from $2 billion per week in July.
• In fact, Bloomberg data found that total credit default swap index trading volumes this year have already exceeded last year’s entire total.

“One part [of demand] is a true bond investor who is looking to hedge their book. Another part is multiasset and equity speculators who are trying to find a cheap hedge to their technology exposure,” Jim Caron, chief investment officer of Morgan Stanley’s portfolio solutions group, recently told the Financial Times.

Alternative Solutions: The massive debt market crunch has the hyperscalers focused on broadening their financing. On Monday, SpaceX announced a $40 billion GPU leasing deal with Apollo; in a statement, the company said the deal “diversifies our funding sources.” Meta, meanwhile, said on Monday it plans to raise $95 billion through waves of stock offerings to continue to fund its buildout.