SpaceX’s $40B AI Debt Deal Gets Pricier as Investor Jitters Grow
SpaceX is close to finalizing a $40 billion debt deal to fund a massive expansion of its AI infrastructure, including chips and data centers, but the money is coming at a noticeably higher cost than the last time the company borrowed. The riskiest portion of the offering is expected to carry an interest rate of about 8.3%, Semafor reported, citing people familiar with the deal.
Apollo and Goldman Sachs are leading the transaction, which is split into slices with different risk levels. A safer tranche, backed by some of SpaceX’s computer chips, is likely to price at around 7.75%. Both rates sit more than one percentage point above where SpaceX’s existing bonds currently trade. Final pricing could still change before the deal closes, which is expected in the coming days. Apollo and Goldman Sachs declined to comment on the transaction.
Higher borrowing costs reflect a sharp pullback in the AI lending market over the past several weeks. A selloff in debt issued by CoreWeave, the cloud computing company that rents out GPU capacity to AI developers, has made lenders more cautious about companies pouring billions into data centers and chips. Credit investors are now asking for bigger returns before they fund the next wave of AI buildouts, and SpaceX is one of the first major borrowers to feel that shift.
SpaceX’s own bonds have weakened in recent days, even after the company reported stronger-than-expected quarterly earnings. Investors focused instead on SpaceX’s aggressive capital spending plans and growing debt load. The cost of insuring SpaceX’s debt against default has also risen, another signal that sentiment among bond investors has cooled.
The financing arrives as SpaceX, which now trades on Nasdaq under the ticker SPCX, explores a potential merger with Tesla, the electric vehicle maker also led by Elon Musk. A combination would tie two of Musk’s largest companies together at a moment when both are spending heavily on AI. SpaceX’s bonds have also drawn high-profile buyers, including President Donald Trump, who purchased $5 million worth in August.
Investors holding SpaceX stock or bonds should pay close attention to how the deal prices. Rising interest expenses could pressure SpaceX’s profitability and cash flow as they commit billions to AI infrastructure, according to Seeking Alpha. The widening gap between yields on SpaceX’s existing bonds and the new debt suggests lenders want more compensation for the company’s financial risk. For income-focused investors, those higher yields mean bigger payouts, but they also come with more exposure to a company carrying heavy spending commitments in a volatile corner of the market.
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