NVIDIA (NVDA) now holds $21B in SPCX fairness as SpaceX commits completely to NVIDIA GPUs, cementing the AI period’s defining partnership.
Jensen Huang initiatives AI infrastructure spending to surge from $800 billion immediately to between $3 trillion and $4 trillion yearly by decade’s finish.
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Over the previous two weeks, 4 separate headlines could look unrelated, however my guess is that they’re including as much as one thing a lot bigger.
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First, Elon Musk dedicated SpaceX completely to NVIDIA GPUs through the firm’s first convention name on August 4th. Second, Musk set a goal of 10 gigawatts of AI compute by the top of 2027. Third, on August 10, NVIDIA introduced financing partnerships with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR to mobilize over $500 billion of third-party capital. And fourth, NVIDIA disclosed roughly 122.8 million SpaceX shares value about $21 billion in its Q2 13F filed August 14, 2026.
Collectively, they inform one story: the buildout Jensen Huang calls “the biggest infrastructure growth in human historical past” now has a defining partnership.
Placing Collectively the Partnership That May Outline the AI Manufacturing facility Buildout
NVIDIA (NASDAQ:NVDA) sells the GPUs, networking, and full-stack software program behind primarily each frontier AI mannequin. Information Heart income reached $75 billion final quarter, up 92% yr over yr.
SpaceX (NASDAQ:SPCX) is the most recent hyperscale AI purchaser. Past rockets and Starlink, its AI section (Grok, Colossus II, cloud companies) delivered $2.56 billion in Q2 income, up 247% yr over yr, with $15.83 billion of a $18.37 billion single-quarter capex invoice directed to AI infrastructure. Here is why these numbers will quickly look tiny.
On August 4th, Musk spoke of driving SpaceX to 10 gigawatts of computing capability by the top of 2027, which is up from 1.4 gigawatts immediately. The price of getting SpaceX to 10 gigawatts by the top of 2027? Someplace round $500 billion.
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The day after earnings, the market did not ‘purchase’ Musk’s imaginative and prescient. SpaceX shares fell. A number of Wall Avenue companies questioned how Musk may probably obtain the financing to construct out the size of compute he was discussing. Nevertheless, a few days later (August seventh), SpaceX shares started a large rally that quickly introduced the corporate again above its IPO worth.
The catalyst for the rally? Analysis from SemiAnalysis said that SpaceX was really in place to attain its objectives and attain as much as 10 gigawatts by the top of 2027. If SpaceX hit that focus on, SemiAnalysis predicted they might exit 2027 with an ARR of round $305 billion.
Wall Avenue is presently modeling $98 billion in 2027 income and $157 billion in 2028 income.
NVIDIA Declares $500 Billion in Funding
Then, on August tenth, NVIDIA introduced a model new ‘Compute Infrastructure Financing Platform’ alongside Wall Avenue’s largest banks. The platform would mobilize over $500 billion in third-party capital, with NVIDIA agreeing to backstop as much as 25% of the challenge’s price.
And eventually, NVIDIA’s 13F launched on August 14th revealed the corporate had established a $21 billion place in SpaceX.
First, we had SpaceX saying its intention to construct a large quantity of information facilities (completely utilizing NVIDIA’s chips), after which NVIDIA saying a $500 billion financing initiative and enormous funding into SpaceX’s inventory.
I belief you are following together with the sequence of occasions. NVIDIA’s CEO Jensen Huang has repeatedly expressed his admiration for Elon Musk’s drive and skill to face up knowledge facilities in document time. Musk is now focusing on an information heart buildout that’s extraordinarily formidable, however one which faces challenges in financing Musk’s ambitions.
It is a partnership that is sensible. NVIDIA has been searching for extra methods to make use of its steadiness sheet to develop the AI ecosystem, and Musk provides them a ‘backdoor’ to the creation of a brand new hyperscaler. The corporate’s $500 billion platform turns into a means for not simply SpaceX, however different neoclouds, to obtain extra capital and compete with the biggest firms like Amazon, Alphabet, Microsoft, and Meta Platforms.
And by creating a brand new funding supply for this group, NVIDIA continues to diversify its buyer checklist. The truth that NVIDIA’s income stays so concentrated amongst a small group of shoppers stays one of many largest causes the corporate trades close to a market-average ahead P/E regardless of its unbelievable progress charges.
The Way forward for AI Hinges on Elon Musk and Jensen Huang’s Partnership
Jensen Huang has mentioned he anticipated AI infrastructure spending to achieve $3 trillion to $4 trillion yearly by the top of the last decade. When he began utilizing that quantity on convention calls, many analysts mistakenly believed it was an quantity of whole spending throughout the following 5 years.
AI infrastructure estimates fluctuate, however they’re usually round $800 billion in 2026. Consensus continues to develop for 2027, however many estimates place spending subsequent yr at nearer to $1.2 trillion. That quantity is eye-watering for many who have been following AI, but it surely’s nonetheless simply 1/3 of the place Huang sees the market going by the top of the last decade.
So, it is clear that Huang envisions a future for AI that is a lot biggerand occurs a lot sooner than simply about anybody else imagines. Nicely, anybody else other than Elon Musk.
My guess: the budding partnership between NVIDIA and SpaceX will develop into a key driver throughout the following era of the AI race. What we have seen the previous two weeks is just the start.
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