Key Points
- NVIDIA's Q2 13F filing revealed a nearly $21 billion stake in SpaceX, making it the company's second-largest public holding.
- The investment originated from a private $10 billion stake in xAI made before its merger with SpaceX, raising circular financing concerns.
- Elon Musk confirmed SpaceX will build exclusively on NVIDIA chips, reinforcing worries that NVIDIA's investments help fund its own chip sales.
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As the world’s leading AI semiconductor company, NVIDIA's (NASDAQ: NVDA) portfolio moves are closely watched by investors. The company just released its latest 13F filing, which details its public holdings as of the end of Q2. Notably, perhaps the most discussed stock in the market in recent months appeared in NVIDIA’s filing: SpaceX (NASDAQ: SPCX).
At first glance, investors may consider Big Green’s allocation to SpaceX as a clear sign of confidence in the stock’s outlook. While this thinking may not be unwarranted, NVIDIA’s investments often signal more than initially meets the eye.
Specifically, the concept of ‘circular financing’ has become a notable concern within the investment community, particularly regarding NVIDIA. These concerns come as NVIDIA has significant investments in companies that are also its customers.
This raises questions about whether NVIDIA has long-term conviction in these stocks or simply wants to help them finance more chip purchases.
Diving into the details of NVIDIA’s relationship with SpaceX can help investors determine what this allocation actually signals.
SpaceX Soars to NVIDIA’s Second Largest Public Holding
In its Q2 13F, NVIDIA revealed a nearly $21 billion stake in SpaceX. This allocation is significant, making SpaceX the company’s second-largest public equity holding and accounting for 33% of its 13F portfolio. However, it is important to trace back the origins of this investment.
NVIDIA invested approximately $10 billion in xAI, Elon Musk’s artificial intelligence company and the developer of the AI model Grok, in January 2026. This was initially a private investment, coming before xAI merged with SpaceX and before SpaceX's record-breaking IPO. These facts tell investors multiple things.
First off, NVIDIA’s investment is not new in a literal sense. Rather, the investment simply now has to be publicly disclosed, as SpaceX is now a public company. In turn, investors should not view the allocation as NVIDIA recently making a positive judgment about SpaceX’s future.
Second, it is important to recognize that NVIDIA initially invested in xAI, which is only a portion of the SpaceX that exists today. This makes NVIDIA’s allocation to SpaceX look more like a decision to invest in the AI portion of the business, rather than in the overall space economy thesis. Still, xAI and SpaceX merged just a month after NVIDIA’s xAI investment, something that NVIDIA likely knew would happen beforehand.
Musk’s Statements Indicate Circular Financing Motivations
The business relationship between NVIDIA and SpaceX gives weight to the idea of circular financing. Notably, Elon Musk has said that SpaceX will exclusively use NVIDIA chips for its AI infrastructure projects. Per Musk in SpaceX’s Q2 earnings call, “And going forward, we've decided to build exclusively on NVIDIA because we think the Vera Rubin architecture is the best architecture. We think it's the best AI computer, and we greatly value our close cooperation and partnership on many levels with NVIDIA. So we're exclusive to NVIDIA.”
Thus, Musk clearly intends for SpaceX to be a significant NVIDIA customer going forward. The cash the company has received from NVIDIA’s initial $10 billion investment is funds the firm can use to finance the purchase of NVIDIA chips—a representation of circular financing.
This is far from the only example of NVIDIA engaging in circular financing. The company has significant investments in neoclouds CoreWeave (NASDAQ: CRWV) and Nebius (NASDAQ: NBIS), which also purchase chips from it. Additionally, NVIDIA invested $30 billion in OpenAI in February and now plans to provide up to $105 billion in financing for OpenAI’s Ohio data center campus. NVIDIA has also said it will invest up to $10 billion in Anthropic, a chip customer.
The moral of the story is that NVIDIA has not shied away whatsoever from investing in companies that buy its chips. The major Big Tech hyperscalers are the key exceptions to this. These companies have among the highest operating cash flows of any companies in the world and don’t necessarily need equity investments to fund chip purchases.
Meanwhile, companies like CoreWeave, Nebius, OpenAI, Anthropic, and SpaceX are on the other side of the equation. They are growing briskly but have yet to achieve robust profitability, making outside investments an important part of sustaining AI purchases.
NVIDIA: Invested in SpaceX’s Long-Term Success, Despite Circular Financing Concerns
Considering these factors, investors should not view NVIDIA’s SpaceX investment purely as a sign of conviction in the company’s overall future. However, NVIDIA clearly has a vested interest in SpaceX’s long-term success for multiple reasons. The more successful SpaceX becomes, the more chips it could theoretically buy from NVIDIA, while the value of its investment could also grow. Thus, although NVIDIA’s investment has elements of circular financing, this support is ultimately still a positive for SpaceX as it looks to be one of the leading AI developers.
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