According to a confidential IPO prospectus, SpaceX's debt increased by nearly two-thirds last year, from US$14 billion at the end of 2024 to approximately US$23 billion at the end of 2025. This surge mainly reflects the significant new financial liabilities that the acquisition of xAI brought to the company.
Documents show that much of that debt is related to a lease agreement with Valor Equity Partners to lease AI infrastructure equipment such as chips for xAI, which SpaceX records as $4.5 billion in debt on its balance sheet. The prospectus also stated that Antonio Gracias, Valor’s CEO and chief investment officer, is also a director of SpaceX.
SpaceX's debt levels are unlikely to cause serious concerns among credit analysts. As of the end of 2025, the company held about $250 billion in cash and cash equivalents, slightly more than its debt. The cash reserve has more than doubled compared with 2024, which is likely to come from the funds included in the acquisition of xAI - xAI has previously raised a large amount of cash from external investors.
The company reminds in the risk factors section of the prospectus that "high debt levels may have an adverse impact on financial conditions." And 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 encounters problems.
The document also shows that SpaceX adjusted the compensation method for Chief Financial Officer Brett Johnson, a change that is likely to be related to a significant increase in debt and capital expenditures.
In January of this year, the SpaceX board of directors modified Johnson's equity incentive plan: the original grant conditions were linked to the company's higher free cash flow target, and the modification was based on reaching milestones based on a looser adjusted earnings indicator, which excludes depreciation and interest expenses.
A SpaceX spokesperson did not comment yet.
Companies may continue to raise debt after going public. Materials disclosed to investors in recent weeks indicate that SpaceX will have "access to a full range of debt and equity financing tools to fund future growth investments." Previous reports stated that SpaceX plans to sell approximately US$750 billion in shares in the IPO, and the specific size may be adjusted based on investor demand.
SpaceX’s launch pitch focuses heavily on its early plans for an orbital data center, which uses rockets and satellites to deploy AI infrastructure into space. If this technical goal is achieved, Elon Musk will receive additional stock awards.
It was reported earlier this month that SpaceX spent nearly $210 billion in capital expenditures last year, almost double the previous year, most of which was invested in the xAI business, which also generated nearly $20 billion in interest expenses.
Profits from the company's internet business, Starlink, help cover those interest charges. Starlink achieved adjusted earnings before interest, taxes, depreciation, amortization and equity incentives of US$72 billion last year.
It has been previously reported that SpaceX suffered a net loss of nearly US$50 billion last year, while revenue increased by about one-third to US$187 billion.