New Delhi, Oct. 7 -- Elon Musk's SpaceX is in talks with banks and investors to raise $40 billion of debt to buy chips from Nvidia Corp., people familiar with the matter said, underscoring the insatiable demand among AI developers for more computing power.

Pacific Investment Management Co. is one of the investment managers looking at the deal, said the people, who spoke on condition of anonymity as the talks are private. SpaceX's fundraising discussions are in an early stage and could end without a deal being completed, they said.

Musk's AI, satellite and rocket conglomerate is seeking to raise about $10 billion in bank loans and $30 billion in investment-grade debt to pay for the chips, the Financial Times reported earlier, citing unna...