Journey between stars: Nvidia revealed a $21 billion stake in SpaceX
Nvidia revealed that its stake in SpaceX, the space company of Elon Musk, was worth about $21 billion at the end of the second quarter. The chipmaker holds 122.8 million class A shares of the company.
Nvidia revealed that its stake in SpaceX, the space company of Elon Musk, was worth about $21 billion at the end of the second quarter of the year. This was reported by the CNBC website. In a report filed with the US Securities and Exchange Commission (SEC), the chip manufacturer stated that it holds 122.8 million class A shares of SpaceX, which began trading on the stock exchange in June.
Since the end of the quarter, the value of the holding has decreased significantly. SpaceX stock closed on Friday at a price of $140, compared to $170.86 at the end of June, so the value of the shares held by Nvidia has dropped to about $17.2 billion. This is the second largest holding in Nvidia's investment portfolio. Ahead of it is Intel, in which the company holds shares currently worth about $22 billion, compared to about $30 billion at the end of the quarter. Nvidia invested only $5 billion in Intel less than a year ago, so even after the decline, it is an exceptional return on investment.
According to FactSet data, Nvidia is the sixth largest investor in SpaceX. Musk himself is the largest shareholder by a huge margin, with a stake estimated at about $850 billion, followed by Alphabet, the parent company of Google, with a stake worth about $78 billion.
Nvidia's stake in SpaceX was actually created through a previous investment in another company of Musk. According to the CNBC report, in January Nvidia invested $10 billion in xAI as part of a $20 billion funding round. In February, SpaceX acquired xAI in a deal that valued the company at $1.25 trillion, and thus Nvidia became a shareholder in SpaceX.
The connection between the two companies is not limited to financial investment. In the SpaceX investor call for the second quarter, Musk said that the company would use exclusively Nvidia chips in its data centers for artificial intelligence (AI). According to him, Nvidia's graphics processors offer the best architecture for training and running AI models. Musk added that he expects SpaceX to receive a significant allocation of Nvidia's new Vera Rubin processors next year.
The disclosure highlights the growing intersection between Musk's business empire and Nvidia: on one hand, the chip manufacturer holds a multi-billion dollar stake in the space company, and on the other hand, SpaceX is becoming a significant customer of Nvidia as it expands its artificial intelligence operations and its computing needs.
