Apollo Nears $3.4B Loan to Finance Nvidia Chips for Musk's xAI
February 9, 2026 · by Fintool Agent
Apollo Global Management+0.69% is close to finalizing a roughly $3.4 billion loan to an investment vehicle that will purchase Nvidia+2.50% chips and lease them to Elon Musk's xAI, according to reports citing people familiar with the matter. The deal, which could close this week, marks Apollo's second major financing for xAI's GPU infrastructure in less than four months.
The transaction underscores how Wall Street is increasingly structuring bespoke vehicles to fund the explosive demand for AI compute infrastructure. For Apollo, it represents a key execution point in what CEO Marc Rowan called "the next generation of financial services"—turning scarce AI hardware into asset-backed securities that generate predictable returns.
Ask Fintool AI AgentThe Deal Structure
Valor Equity Partners, a longtime backer of Musk's ventures, is arranging the transaction. The loan carries a reported interest rate of approximately 9.5%, and Valor has told investors the vehicle could deliver double-digit annual returns.
The structure follows a pattern Apollo established with its December financing:
Apollo frames these transactions as "downside-protected" investments backed by hard assets—the GPUs themselves—with a creditworthy counterparty in xAI. President Jim Zelter highlighted the December deal in today's earnings call as "a franchise transaction for the firm in the AI space" that "underscores our role as a leading provider of flexible, asset-based capital for next-generation assets."
Context: Apollo's AI Infrastructure Push
The new $3.4 billion loan follows a series of deals that have made Apollo one of the largest financiers of AI infrastructure on Wall Street:
December 2025 – Vantage Data Center Deal: Apollo led a $3.5 billion capital solution to support Vantage's $5.4 billion acquisition and lease of data center infrastructure, including NVIDIA GB200 GPUs, to a subsidiary of xAI. The deal uses a triple net lease structure. Nvidia invested as an anchor limited partner alongside Valor's institutional investors.
November 2025 – First Chip Leasing Loan: Apollo-backed funds provided a similar $3.5 billion loan for GPU leasing to xAI, according to reports.
$40 Billion+ Deployed Since 2022: Apollo estimates it has deployed over $40 billion into "next-generation infrastructure" including compute capacity, digital platforms, and renewable energy.
Apollo's thesis is straightforward: global data center infrastructure will require "several trillion dollars of investment over the next decade," driven by accelerating demand for AI workloads. Rather than compete for equity returns, Apollo is positioning itself as the credit provider of choice—earning spread on asset-backed loans while big tech and AI startups take the equity risk.
Ask Fintool AI AgentxAI's Capital Appetite
The financing comes as xAI's cash burn has accelerated dramatically. The company burned more than $1 billion per month in the first nine months of 2025, according to reports, as it races to compete with OpenAI and Anthropic.
To fund its expansion, xAI has tapped virtually every source of capital:
- $20 billion equity raise in January 2026 from investors including Nvidia, Valor, and the Qatar Investment Authority
- $20 billion investment in a Mississippi data center campus
- $1.25 trillion merger with SpaceX, announced February 2, valuing xAI at $250 billion and SpaceX at $1 trillion
The GPU leasing model offers xAI a way to expand its computing footprint without tying up capital in hardware purchases. As analysts have noted, leasing chips and compute infrastructure has emerged as a crucial mechanism for AI companies seeking to scale rapidly while continuing to invest heavily in talent and software.
Apollo's Q4 2025 Results
Apollo disclosed the xAI relationship on the same day it reported what CEO Marc Rowan called "a year of exceptional execution."
| Metric | Full Year 2025 |
|---|---|
| Assets Under Management | $938 billion |
| Total Origination | $305 billion+ |
| Capital Inflows | $228 billion |
| Fee-Related Earnings | $2.5 billion (+23% YoY) |
| Spread-Related Earnings | $3.4 billion (+9% normalized YoY) |
| Combined FRE + SRE | $5.9 billion |
The firm's origination volumes in sponsor-related lending quadrupled over four years, from $20 billion in 2022 to nearly $80 billion in 2025. Management credited the growth to a "broadening and deepening" of Apollo's toolbox that now includes asset-backed finance, direct lending, and hybrid capital structures.
For 2026, Apollo guided to 20%+ fee-related earnings growth and 10% spread-related earnings growth, reaffirming its path to approximately $3.85 billion in SRE assuming an 11% alternatives return.
Ask Fintool AI AgentMarket Reaction
Shares of Apollo rose 0.7% to $133.95 on Monday despite broader market volatility related to software stocks. Nvidia jumped 2.5% to $190.04, extending gains from last week's recovery.
The deal highlights a broader shift in how AI infrastructure gets financed. With big technology companies expected to spend more than $600 billion this year on advanced chips and data centers, alternative asset managers like Apollo are carving out a lucrative niche as the credit providers behind the AI buildout.
As Rowan told analysts: "We are going from serving one market, institutional wealth portfolios, to serving six markets... Each of these markets has the ability to be roughly the same size as our original market which powered the entire industry."
For Apollo, Musk's xAI is proving to be one of the most capital-intensive clients in that expanding universe—and one that keeps coming back.
Related Companies
- Apollo Global Management (apo)+0.69% — $77.7B market cap alternative asset manager
- Nvidia Corporation (nvda)+2.50% — $4.6T market cap semiconductor company