According to a confidential IPO filing, SpaceX's debt increased by nearly two-thirds last year, rising from $14 billion at the end of 2024 to approximately $23 billion by the end of 2025. This sharp increase primarily reflects the significant new financial liabilities incurred from the acquisition of xAI. The document indicates that a large portion of this debt is tied to a leasing agreement with Valor Equity Partners, used to lease AI infrastructure equipment such as chips for xAI. SpaceX has recorded this as a $4.5 billion debt on its balance sheet. The filing also notes that Valor's CEO and Chief Investment Officer, Antonio Gracias, serves as a director at SpaceX. SpaceX's elevated debt level is unlikely to cause significant concern among credit analysts. As of the end of 2025, the company held approximately $250 billion in cash and cash equivalents, slightly exceeding its total debt. The cash reserves more than doubled from 2024, likely due in part to funds incorporated during the xAI acquisition—xAI had previously raised substantial cash from external investors. In the risk factors section of the filing, the company warned that "high levels of indebtedness could adversely affect its financial condition." However, its annual cash burn—defined as adjusted earnings minus capital expenditures—of about $140 billion may be more concerning, especially as its cash-cow Starlink satellite internet business faces challenges. The filing also revealed that SpaceX adjusted the compensation structure for CFO Bret Johnsen, a change likely linked to the sharp rise in debt and capital expenditures. In January, the company's board modified Johnsen's equity incentive plan: originally tied to higher free cash flow targets, it now relies on achieving milestones based on a more lenient adjusted earnings metric, which excludes depreciation and interest expenses. A SpaceX spokesperson declined to comment. The company may continue to pursue debt financing after going public. Materials recently disclosed to investors state that SpaceX will have "access to a full range of debt and equity financing tools to fund future growth investments." Previous reports indicated that SpaceX plans to sell approximately $750 billion worth of shares in its IPO, though the final size may adjust based on investor demand. SpaceX's investor pitch heavily emphasizes its early-stage plans for orbital data centers, which involve using rockets and satellites to deploy AI infrastructure in space. If these technological goals are achieved, Elon Musk is set to receive additional stock awards. Earlier this month, it was reported that SpaceX's capital expenditures reached nearly $210 billion last year, almost double the previous year's figure, with the vast majority directed toward xAI. The xAI business also generated close to $20 billion in interest expenses. Profits from the company's Starlink internet business helped cover these interest costs. Starlink reported adjusted earnings before interest, taxes, depreciation, amortization, and stock-based compensation of $72 billion last year. Previous reports also indicated that SpaceX posted a net loss of nearly $50 billion last year, while revenue grew by approximately one-third to $187 billion.
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