SpaceX is preparing to launch its first-ever investment-grade bond offering as part of a broader strategy to finance its expanding artificial intelligence (AI) initiatives following a landmark $75 billion initial public offering (IPO). Major banks including Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, and Morgan Stanley, which previously provided bridge financing to the company, began investor calls on Monday to market the bond sale.

The upcoming offering is expected to feature maturities ranging from five to 30 years, according to a person familiar with the matter who requested anonymity. SpaceX aims to raise at least $20 billion, which would primarily be used to refinance its existing bridge loan of similar size. This loan currently constitutes the majority of the company’s approximately $29.1 billion in long-term debt.

Credit rating agencies recently assigned SpaceX an investment-grade status, facilitating access to cheaper borrowing costs. Moody’s rated the company at Baa1, Fitch at BBB-plus, and S&P Global provided a slightly lower BBB rating. All these designations place SpaceX comfortably above speculative or “junk” status.

The record-breaking IPO has significantly boosted SpaceX’s valuation and liquidity, with nearly $101 billion held in cash and equivalents as of the last reporting date. During earlier discussions with prospective investors, SpaceX’s finance chief Bret Johnsen and President Gwynne Shotwell indicated the IPO would likely be the firm’s final equity raise. The company now plans to rely on debt markets to fund growth as it seeks to avoid diluting current shareholders, including Elon Musk.

Musk has extensively utilized debt financing across his various ventures, though SpaceX’s bond offering would mark his first public investment-grade corporate bond issuance. Analysts from Oppenheimer & Co. project that SpaceX could accumulate more than $400 billion in net debt by 2031, a level that would far exceed that of nearly all other U.S. corporations and more than triple Oracle’s current debt load. The funding strategy is expected to combine heavy debt issuance with around $40 billion in additional equity capital.

SpaceX is joining a wave of major technology firms leveraging debt markets to capitalize on the AI boom. Since late last year, companies including Alphabet and Amazon have collectively raised over $300 billion in AI-related debt, contributing to near-record volume in credit markets. Investor demand remains robust; for example, Nvidia recently issued $25 billion in bonds that attracted orders more than triple the offering size.

AI is anticipated to be a major growth driver for SpaceX in coming years. The company has secured contracts worth approximately $75 billion to provide computing power to Google and Anthropic PBC. Additionally, its position as the operator of the Starlink broadband network and as a key launch provider for NASA and the Department of Defense was cited by Moody’s as factors underpinning the investment-grade credit rating.

However, substantial risks accompany SpaceX’s ambitious expansion plans. Moody’s highlighted that capital-intensive AI infrastructure projects require significant ongoing investment and may face regulatory challenges related to energy consumption and environmental impact. Governance concerns were also noted, given Musk’s dominance in voting power and limited independent board oversight, which could heighten operational risks.