After SpaceX merges with xAI, Musk is planning a new financing scheme to pave the way for an IPO and reduce debt pressure

According to Bloomberg, citing sources familiar with the matter, after SpaceX completed its merger with xAI, Elon Musk’s banking advisory team is working on a new financing plan aimed at alleviating the heavy debt burden accumulated over recent years from large-scale acquisitions and investments. Reports indicate that this financing scheme may pave the way for a potential initial public offering (IPO) to optimize the financial structure and reduce interest costs.

In recent years, Musk has taken on nearly $18 billion in debt (approximately 124.37 billion RMB at current exchange rates) due to the acquisition of social media platform X (formerly Twitter) and the founding of AI company xAI. Notably, the $12.5 billion financing plan relied upon for the Twitter acquisition in 2022 still causes the company to bear tens of millions of dollars in monthly interest expenses, creating significant financial pressure. To address this situation, the new financing plan is seen as a key measure.

Morgan Stanley is expected to lead this financing arrangement. The bank previously participated in the financing of the 2022 Twitter acquisition and played an important role in subsequent debt raising for xAI. Reports have indicated that Morgan Stanley, Goldman Sachs, Bank of America, and J.P. Morgan are considered potential lead underwriters for SpaceX’s possible IPO, but no final decision has been made yet. The specific timing, scale, and lineup of underwriters remain uncertain.

In addition to Morgan Stanley, the debt holders of X include several international financial institutions such as Bank of America, Barclays, Mitsubishi UFJ Financial Group, BNP Paribas, Mizuho Financial Group, and Société Générale. These institutions have played significant roles in Musk’s debt financing, and their attitudes may influence the progression of the upcoming financing plans.

Looking back at the merger process, in March 2023, Musk announced the merger of X with xAI, valuing X at $45 billion (including debt). Subsequently, xAI took on an additional $5 billion in debt, further increasing the overall debt load. On February 2 of this year, SpaceX’s official website published a statement signed by Musk, officially confirming the xAI acquisition and laying the groundwork for subsequent financing and IPO plans.