Apollo Nears $250 Million in Gains From xAI Debt as SpaceX Deal Boosts Value

Apollo Global Management Inc. Has realized approximately $250 million in paper gains from its investment in debt tied to Elon Musk’s artificial intelligence company, xAI, bolstered by the recent merger with SpaceX. The gains stem from Apollo’s strategic bet on providing xAI with access to Nvidia Corp.’s graphics processing units (GPUs).

Apollo’s Investment in xAI

Apollo has invested a total of $7 billion in xAI debt, according to sources familiar with the matter. In December, the firm initially purchased approximately $3.5 billion of xAI’s debt at 99 cents on the dollar, carrying a 10% coupon. The subsequent merger between xAI and SpaceX, announced on February 3, 2026, triggered an increase in the debt’s value, peaking at 106 cents.

Apollo had previously syndicated roughly half of the initial $3.5 billion investment to clients at the original 99-cent price, retaining the remainder. This allowed the firm to realize approximately $120 million in paper profits on that portion of the investment. An additional $3.5 billion of loans were purchased in February, also now trading at a higher value, with Apollo offloading some of this at the 99-cent issue price to insurers and asset managers, generating another $100 million in paper gains.

Private Lending and Market Transparency

These transactions offer a rare glimpse into the typically opaque world of private lending, where pricing information is not usually publicly disclosed. Apollo has been actively working to increase transparency in the private credit market, opening up trading on the xAI debt it holds and building a marketplace in partnership with banks to provide real-time pricing. Last year, the firm traded nearly $10 billion in high-grade private loans.

Valor Equity Partners and Colossus 2

All of Apollo’s debt financing for xAI is directed towards a special purpose vehicle managed by Valor Equity Partners. This vehicle is designed to facilitate xAI’s rental of Nvidia chips for its Colossus 2 data center located in Memphis.

Apollo’s Risk Assessment

Apollo President Jim Zelter indicated at a recent conference that the firm took on “negligible residual risk” with the xAI deal, stating that the firm’s success wasn’t contingent on continued positive trends. Bloomberg

Representatives from both Apollo and xAI declined to comment on the specifics of the transactions.