SpaceX Debt Risk Rises as Long-Dated Bonds Weaken
SpaceX's credit default swap costs increased to 194 basis points from 110 in June, and its 50-year bonds are trading near 85 cents on the dollar. The company's capital spending reached $20.9 billion in fiscal 2025 while operating cash flow was $6.79 billion, and total debt climbed to $24.5 billion. Investors are watching whether new AI data centers can generate enough cash to justify the borrowing.
SpaceX’s default-insurance costs have climbed sharply since June, while its longest bonds now change hands well below face value. Shorter-dated debt is less discounted, suggesting investors see near-term stability but growing longer-term uncertainty.
The company’s capital needs have outpaced internally generated cash: fiscal 2025 capex hit $20.9B versus $6.79B from operations, and debt rose to $24.5B. A reported $40B borrowing plan would dwarf that total. Management says new compute capacity can recover its cost within a year, with cloud contracts beginning to scale in October.
If SpaceX’s borrowing costs keep rising, its plans for AI data centers could become harder to finance, potentially affecting cloud customers, AI developers, and investors exposed to its debt. A slower buildout may delay compute capacity, while successful payback could support cheaper or more abundant AI services. The outcome may also shape how markets price other capital-intensive technology projects.