Elon Musk's X and xAI plan $17.5 billion debt repayment: Report

Elon Musk-owned AI company xAI and social media platform X are reportedly planning to repay $17.5 billion debt tied to the company. According to Bloomberg news, Morgan Stanley, which handled both companies’ debt raises, has been telling existing lenders on behalf of X and xAI that the firms will repay the outstanding debt. As per the report, the companies have not disclosed where the capital is coming from. The report quotes people, who asked not to be named because the details are private. To recall, xAI raised $20 billion of new equity money in January this year.xAI had earlier acquired X in 2025, taking on $12 billion of the social media company’s debt. Morgan Stanley later arranged a $5 billion debt package for xAI, sources previously told Reuters. In January, xAI raised $20 billion in a Series E funding round. The Bloomberg report said xAI’s $3 billion in high-yield bonds will be redeemed at about $1.17 on the dollar. This means investors will receive a premium, as the bonds were expected to remain in place for at least two more years.When companies repay bonds early, they usually compensate investors with a penalty and the interest that lenders expected to earn over the original term. Some of the debt tied to X and xAI has been outstanding for several years, while other portions are less than a year old and may include penalties for early repayment, the report said.The reported repayment plan follows several major business moves involving the companies. In February, SpaceX acquired xAI in a deal that valued the AI startup at $250 billion. The acquisition gave SpaceX greater flexibility to restructure xAI’s finances. SpaceX is also preparing for an initial public offering later this year.The debt repayment comes ahead as SpaceX is targeting an IPO valuation of around $1.5 trillion, potentially placing it among the most valuable companies in the world. Bank of America, Goldman Sachs, JPMorgan Chase, and Morgan Stanley are expected to serve as lead underwriters. Robinhood Markets is also seeking a role in the IPO, Bloomberg News reported.