Elon Musk’s xAI to repay $3 billion debt early, report claims

Elon Musk's xAI plans to repay $3 billion of high-yield bonds early, Bloomberg News reported on Monday, citing people with knowledge of the matter.

The planned repayment comes as Elon Musk looks to consolidate his businesses and take them public, with SpaceX having bought xAI last month and targeting a June listing

When a company ‌pays back a loan ahead of schedule, it usually has to pay a penalty to investors, plus the interest the lenders were counting on making over the previously agreed-upon period.

The notes jumped about three points on Monday to about $1.17 on $1, the report said, citing Trace pricing data.

The securities were sold in June 2025 with a structure that indicated the debt was expected to remain outstanding for at least two years.

Morgan Stanley led a $5 billion debt package for xAI last year, consisting of high-yield bonds and loans designed to fuel the company's aggressive expansion into artificial intelligence.

In February, ‌SpaceX acquired the artificial intelligence startup in a record-setting deal that valued xAI at $250 billion, giving the rocket maker greater flexibility to streamline xAI's capital structure.

SpaceX is preparing a blockbuster public listing later this year that could value it at over $1.5 trillion.

With the combined business holding a significant amount of debt, bankers have been working on a financing plan that could trim some of the heavy-interest costs that the companies have worked up in recent years, the Bloomberg report said.

The roughly $17.5 billion of debt tied to Elon Musk’s social network X and artificial intelligence startup xAI is set to be paid back in full, as per the report.

While XAI and Morgan Stanley did not immediately respond to the matter for verifying the latest report.