Bengaluru, Feb 9, 2026, 22:58 IST
- Apollo is reportedly nearing a $3.4 billion loan linked to Nvidia chips, which would then be leased to Elon Musk’s xAI, according to sources.
- Valor Equity Partners is handling the deal, which could be finalized as soon as this week.
- These discussions tap into a rising trend of leasing costly AI hardware rather than purchasing it upfront.
Apollo Global Management is nearing a deal on a $3.4 billion loan to an investment vehicle set to purchase Nvidia chips and lease them to Elon Musk’s xAI, according to The Information’s Monday report. 1
The timing isn’t a coincidence. Nvidia’s graphics processing units, or GPUs, power the training and operation of large AI systems, but their costs often hit the books before the revenue rolls in.
This year, big tech giants will pour over $600 billion into advanced chips and sprawling data centers essential for training and running AI. For some builders, converting hardware costs into lease payments is quickly becoming the only viable strategy to stay afloat.
The Information reports that Valor Equity Partners, a longtime backer of Musk-led ventures, is lining up the loan, with a deal possibly closing as soon as this week. SpaceX, Nvidia, and xAI didn’t respond to requests for comment. Apollo also declined to comment. 2
Apollo shares climbed nearly 1% in U.S. trading Monday, with Nvidia gaining around 3.8%. Investors see sustained GPU demand as a key indicator of who sets the tempo for AI spending.
This loan marks Apollo’s second significant bet on a company leasing chips to xAI, following a $3.5 billion loan back in November. The core idea? Lease the compute power and hold onto cash for other needs.
In January, Apollo revealed it led a $3.5 billion financing round tied to a roughly $5.4 billion deal arranged by Valor. The transaction involves leasing data center compute infrastructure, including Nvidia GB200 GPUs, to a subsidiary of xAI. Apollo partner Christopher Lahoud described the investment as “downside-protected,” while Valor founder Antonio Gracias highlighted that the fund offers investors access to “critical” AI compute assets. 3
The earlier financing employed a triple-net lease—where the tenant covers most operating expenses on top of rent—to back a sizable compute cluster, a network of servers and chips dedicated to model training. Nvidia played a key role as an anchor investor in the deal.
The chip funding follows Musk’s announcement that SpaceX has acquired xAI, with that deal pegging SpaceX’s value at $1 trillion and xAI’s at $250 billion. He’s clearly aiming to strengthen ties between his ventures. PitchBook analyst Ali Javaheri noted that Starlink “adds an AI revenue layer” and highlighted the potential for orbital data centers—space-based infrastructure designed to power future computing. 4
Musk’s drive places xAI in a tight contest alongside Alphabet’s Google, Meta, Anthropic backed by Amazon, and OpenAI—all splashing out big on chips and data centers.
Apollo is pushing further into lending. On Monday, the firm reported a 13% jump in fourth-quarter profit and announced it originated a record $97 billion in new loans and other investments. CEO Marc Rowan described the market’s “overreaction” as particularly sharp in some areas. 5
However, the xAI-linked loan hasn’t been finalized yet, and the terms could still change or collapse. If interest in AI services drops or chip prices fluctuate, a leasing firm might get stuck with rapidly depreciating hardware—while the tenant remains on the hook for payments.
Right now, financiers see AI compute as infrastructure: build it, lease it out, then refinance. How long this approach lasts hinges on whether the current surge in AI spending remains solid and how fast those chips on the books turn obsolete.
