• Apollo Global Management (APO) is leading a $3.5 billion financing deal to support Valor Compute Infrastructure's acquisition and lease of NVIDIA (NVDA) GB200 GPUs to xAI.
  • The deal, structured as a triple-net lease, provides downside-protected AI exposure and follows xAI's recent $20 billion Series E funding round.
  • Apollo aims to make portions of the loan tradable, expanding the private credit market while supporting surging AI compute demand.

Apollo Global Management is nearing a $3.5 billion lending agreement to finance Valor Compute Infrastructure's acquisition of NVIDIA GB200 GPUs and data center infrastructure, which will be leased to Elon Musk's xAI, according to people familiar with the matter. The deal, expected to close imminently, corrects earlier reports of a $3.4 billion figure and aligns with xAI's rapid expansion following its $20 billion Series E funding round, which closed just one day prior with investors including NVIDIA, Fidelity, Qatar Investment Authority, and MGX.

Efforts to structure the financing have progressed smoothly, with Apollo deploying its expertise in asset-backed lending to create a triple-net lease arrangement that offers strong protection for investors. "This is a hallmark investment in the AI infrastructure space, combining growth potential with robust downside safeguards," said Christopher Lahoud, a senior partner at Apollo involved in the transaction, highlighting the firm's strategy to gain exposure to high-growth sectors like AI through structured credit. Apollo has deployed over $40 billion into next-generation infrastructure since 2022, including compute and renewables, and this deal adds to that portfolio while supporting xAI's capital-intensive model training for advanced systems like Grok 4.

Without this financing, xAI might have faced delays in scaling its second data center, crucial for keeping pace with competitors in the AI race. The deal involves Valor Equity Partners, which manages about $55 billion in assets and created the Valor Compute Infrastructure vehicle with NVIDIA as an anchor limited partner to lease the hardware. NVIDIA's GB200 GPUs are central to the compute cluster, reflecting the chipmaker's dual role as both a supplier and investor in the AI ecosystem. Apollo, which manages approximately $908 billion in assets as of September 2025, traded $6.7 billion in private credit last year and continues to pursue share buybacks under a $3 billion program alongside such financings, balancing growth initiatives with shareholder returns.

In the short term, Apollo may buy more portions of the loan at par to enable secondary trading, a move that could expand the private credit market for similar AI infrastructure deals. Long-term, this financing scales xAI's operations and sets a precedent for more structured financings as demand for AI compute surges, with Apollo estimating trillions will be needed for global data centers over the next decade amid what it calls a "Global Industrial Renaissance." The transaction also complements Apollo's other asset-backed activities, such as its aviation lease ABS (MAPS 2026-1) with 27 aircraft, showcasing a diversified approach to infrastructure investing.

Attempts to reach xAI and Valor for additional comments were not immediately successful, but sources indicate that negotiations have focused on ensuring timely deployment of the GPUs to support xAI's aggressive growth timeline. As AI workloads explode, driving unprecedented data center energy needs, deals like this highlight how private credit is stepping in to fill financing gaps, with Apollo acting as both lender and potential market maker in a rapidly evolving sector.