Credit risk jumps at Musk’s SpaceX on worries over its borrowing spree

By the Editorial Team · Friday, October 9, 2026

Credit risk for SpaceX has reached a record high as investors react to the company’s plan to raise $40 billion in additional debt to fund the purchase of Nvidia chips and expand into artificial intelligence. The elevated risk perception highlights market concerns about the feasibility of Musk’s ambitious growth strategy amid skepticism over SpaceX’s ability to succeed in the competitive AI and space computing sectors.

Credit risk associated with Elon Musk’s aerospace and technology company, SpaceX, has surged to a record high amid investor concerns over the company’s ambitious borrowing plans, according to market data from Wednesday.

The five-year credit default swaps (CDS) spread for SpaceX reached 194 basis points, up from around 110 basis points when trading began in June. This means that protecting $1 million of SpaceX’s debt against default now costs approximately $19,400 annually. Simultaneously, the yield spread on SpaceX’s 2056 bonds over comparable U.S. Treasuries widened by 0.09 percentage points to 2.36 percentage points, signaling increased risk perception among bondholders.

These developments follow reports that SpaceX is seeking to raise $40 billion in total debt financing, comprising $10 billion in bank loans and $30 billion in investment-grade bonds. The funds are intended primarily for the company’s planned purchase of Nvidia chips, as SpaceX expands its operations beyond aerospace into artificial intelligence technology. Private equity firm Apollo is anticipated to lead the financing arrangement, with bond management firm Pimco reportedly involved in discussions as a potential lender.

This proposed issuance comes just months after SpaceX completed a $25 billion investment-grade debt offering in June, which itself followed an unprecedented $86 billion initial public offering. The fresh debt raise underscores Chief Executive Elon Musk’s strategy of heavily investing in Nvidia’s technology to support the company’s ambitions in frontier AI and space-related computing.

However, some analysts have expressed skepticism about the company’s prospects. Morgan Stanley analyst Adam Jonas noted doubts among investors regarding SpaceX’s potential to establish itself as a significant provider of advanced AI models or to deploy substantial orbital computing resources within a viable timeframe.

The market’s reaction reflects a growing wariness of the risks tied to Musk’s expansive vision for SpaceX, especially given the scale of its borrowing and the uncertainties that accompany its foray into the competitive AI sector.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.