SpaceX launches $25bn notes offering to fund AI expansion

Elon Musk's SpaceX has launched a five-tranche notes offering aimed at raising at least $25 billion, as the newly public company seeks funding for its capital-intensive AI expansion.

SpaceX's AI ambitions carry a hefty price tag, requiring tens of billions of dollars in investment in data centers, computing hardware and power infrastructure.

As reported by Reuters, the offering consists of 5-year, 7-year, 10-year, 20-year, 30-year tenor senior unsecured notes, according to a document seen by Reuters. Proceeds will be used to repay borrowings under its bridge loan facility as well as for general corporate purposes.

The offering, which is SpaceX's first investment-grade dollar bond issuance, has drawn nearly $85 billion ‌in orders, the source said.

Bank of America, Citigroup, JPMorgan Chase, Goldman Sachs and Morgan Stanley are managing the sale, according to the document.

Credit rating agencies assigned the company investment-grade ratings last week, signaling confidence in SpaceX's financial stability as it moves forward with its costly AI plans.

The rockets-to-AI firm's shares rebounded on Tuesday, following a recent selloff tied to a broader tech pullback, after a blockbuster debut on June 12.

Notes offering:

A notes offering is a way for a company to borrow money from investors while in exchange, investors buy the notes and receive interest payments over time, with the expectation that the company will repay the principal later.

This is similar to a bond issuance, though structured privately in SpaceX’s case.