Elon Musk predicts the slaughter of neoclouds after 40 billion in debt for SpaceX

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Musk claims that lenders have almost completely turned off the tap to neoclouds, these rental companies of computing power which make a living solely from their data centers. He sees more than 200 disappear or be swallowed.

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Musk himself announced the operation on X. This is a debt that is mainly repayable in advance: SpaceX will be able to pay it off before maturity if its cash flow allows it. The GPUs (graphics processors that run AI models) will be delivered in the first and second quarters of 2027. The billionaire plans to repay the bulk in advance and promises a marginal impact on the fourth quarter accounts.

“In recent weeks, debt markets have almost completely cut off access to money for any company that does not have substantial revenue independent of AI data centers. SpaceX has closed $40 billion in debt for GPUs, but we are investment grade and we have revenue from Starlink and launches. »

On the lender side, the Financial Times named Apollo Global Management as leader on October 7, with around $10 billion in bank loans and $30 billion in rated debt. Pimco was among the prospective financiers. Bloomberg, however, tempers the announcement. According to its sources, discussions on the price of this debt were still continuing on Sunday and the operation was not formally completed.

The rest of the message is significantly less friendly for the rivals. His prediction is in two sentences: “More than 200 neoclouds will experience guppy death and consolidation. Some will make it, but not many. » And SpaceX will not buy any of them.

The stock market did not wait for Musk. CoreWeave lost approximately 13% for the week ended October 23. The stock hit $53.50 on the 22nd, its one-year low, before closing Friday at $54.24. UBS reduced its price target from 120 to 105 dollars, without giving up its buy recommendation.

The economic model of neoclouds can be summed up quickly. These companies borrow to buy Nvidia chips, then lease them to AI labs. When credit becomes more expensive, the margin melts like snow in the sun. Quoted by CoinDesk, investor Chamath Palihapitiya finds many neoclouds “poorly financed and poorly managed”. He fears that construction delays will leave chips idle in 2027, unable to cover the cost of their financing.

The cloud giants always find buyers. Goldman Sachs predicts that AWS, Microsoft, Google and Meta will borrow $250 billion this year and $400 billion in 2027. Morgan Stanley expects more than $570 billion in AI-related debt issuance worldwide in 2026.

Machine-translated from French