Exclusive: SpaceX $40 billion debt deal gets pricey as AI fears spread

SpaceX is in the process of finalizing a $40 billion debt raise, but the interest rates associated with this deal are significantly higher than those from its previous bond offerings, highlighting increasing apprehensions within the artificial intelligence sector. Sources familiar with the negotiations indicate that the lowest-rated segment of the debt is projected to carry an interest rate of approximately 8.3%. This deal is being orchestrated by Apollo Global Management and Goldman Sachs. Additionally, a more secure portion of the debt, which is secured by some of SpaceX's assets, is anticipated to be priced around 7.75% next week, which is over a percentage point higher than the current trading rates of SpaceX's existing bonds. This shift reflects a tightening market for AI-related loans, which has experienced a significant downturn in recent weeks.

In August, former President Donald Trump invested $5 million in SpaceX bonds, highlighting interest from prominent investors despite the rising costs associated with the new debt issuance. Both Goldman Sachs and Apollo have chosen not to comment on the situation. It is important to note that the pricing of the debt could still fluctuate before it is officially finalized, which is expected to occur next week.

SpaceX's existing bonds have seen a decline in value recently, as the company's robust earnings reports have been overshadowed by extensive spending plans and growing concerns regarding its overall debt burden. Moreover, worries about the broader implications of artificial intelligence have been exacerbated by a recent debt selloff involving CoreWeave, which has further contributed to the unease surrounding SpaceX’s financial strategies. The cost of default insurance for SpaceX has also increased, indicating a growing skepticism about the company's future plans and financial health.