SpaceX Borrowed $25 Billion and Is Buying Up AI Companies. Here's What That Means for Every Tech Stock in Your Portfolio.

The June 12 initial public offering of Space Exploration Technologies (NASDAQ: SPCX), better known as SpaceX, shattered the record for the largest Wall Street IPO in history. That was only the beginning of a whirlwind of events for Elon Musk's business.

Just days later, on June 16, SpaceX announced its acquisition of artificial intelligence start-up Cursor for a whopping $60 billion. Then on June 22, the company issued its first bonds, selling $25 billion worth of debt.

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These activities illustrate the broader trends occurring across the technology sector. Get ready for a wild ride ahead as tech companies maneuver for dominance in the rapidly evolving artificial intelligence landscape.

SpaceX demonstrates the mounting price for AI

The race is on for leadership positions in the artificial intelligence era. Achieving one will be no small task, as SpaceX's recent moves indicate.

Its acquisition of Cursor demonstrates that it recognizes the importance of creating a robust AI platform -- but it also shows the high costs involved. Cursor is a software development solution built on artificial intelligence that allows users to significantly accelerate programming tasks. It's proven popular, producing over $1 billion in annualized sales last year.

SpaceX is far from alone here. Others in the tech space are rushing to snatch up AI businesses. On June 15, customer relationship management titan Salesforce announced it was spending $3.6 billion to acquire Fin, which provides an AI agent to answer customer inquiries.

Along with acquisitions, AI brings other expenses, particularly related to infrastructure. SpaceX's inaugural bond offering is part of the company's financial maneuverings to position it for the capital commitments to come.

Building and powering the vast server farms required to create and support increasingly sophisticated AI systems requires enormous levels of capital expenditures.

The tech industry's costly AI pursuit

Several businesses in the tech sector are facing the stark reality that AI infrastructure is expensive. Oracle, which provides cloud infrastructure for AI, warned, "We must incur significant capital and operating expenditures to increase our existing data center capacity." To fund its AI infrastructure build-out, Google parent Alphabet recently announced a massive $84.75 billion equity capital raise.