Following reports that SpaceX (SPCX.US) is in talks with banks and investors to raise $40 billion for purchasing Nvidia (NVDA.US) chips, concerns among investors about the company's large-scale borrowing have intensified.

On Wednesday, the company's credit risk indicator rose to its highest level since trading began, and its bonds also weakened noticeably in the secondary market.

According to ICE Data Services, the price of SpaceX's five-year credit default swap (CDS) climbed as much as 14.5 basis points on Wednesday to about 195.4 basis points per year, marking an intraday record high since the CDS began active trading in June this year.

CDS prices typically rise as investor concerns about a company's debt repayment risk increase, so this shift reflects a growing cost for the market to provide default protection on SpaceX debt.

This pressure also spread to the U.S. investment-grade bond secondary market. As of early U.S. trading on Wednesday, the credit spread on SpaceX's bonds with a 6.65% coupon maturing in 2056 widened by 12 basis points to 238 basis points, well above the 175 basis points seen when the bonds were issued in June this year. At that time, the bonds were part of SpaceX's $25 billion debt financing.

The market volatility stems from news that SpaceX is seeking a new round of massive financing. According to reports, the company is considering raising about $40 billion to buy Nvidia chips and support AI infrastructure construction. If completed, this would become one of the largest debt financing deals in the current AI infrastructure investment boom.

Citing people familiar with the matter, media reports said SpaceX plans to complete the financing through about $10 billion in bank loans and $30 billion in investment-grade bonds. Apollo Global Management is leading the related financing arrangements, and the deal is expected to be completed no earlier than 2027. However, the financing negotiations are still at an early stage and may ultimately fail to materialize. SpaceX has not yet responded to the reports.

SpaceX's potential financing plan comes as technology companies and AI model developers borrow heavily to build AI infrastructure. To build and lease large data centers equipped with massive numbers of high-performance chips, related companies are investing and financing hundreds of billions of dollars. The rapid expansion of global computing infrastructure has also driven up costs for land, AI chips, power, and power generation equipment, spawning a series of mega-sized financing deals.

Sal Naro, chief investment officer at Coherence Credit Strategies, said the market is currently facing an "unprecedented supply of debt" with no clear end in sight. He believes the scale of AI infrastructure construction underway globally is unprecedented, and its distinctive feature is that a large number of projects are being carried out almost simultaneously around the world.

SpaceX is not the only company recently seeking massive AI-related financing. According to reports, Broadcom's (AVGO.US) Wall Street underwriting team has also begun planning a new round of about $60 billion in AI chip financing to support related demand from companies such as Anthropic. As the scale of AI infrastructure investment continues to expand, market attention to technology companies' financing needs and debt burdens is also rising.

For SpaceX, if the potential $40 billion financing ultimately goes through, it will further expand its debt scale, while record-high CDS prices and widening bond spreads show that investors have already begun demanding higher risk compensation.