Elon Musk’s social media platform X and his artificial intelligence venture xAI are preparing to fully repay approximately $17.5 billion in outstanding debt, according to a Monday report from Bloomberg News citing sources familiar with the matter.
Morgan Stanley, which has been managing the debt for both companies, has reportedly begun notifying existing lenders that X and xAI intend to settle everything they owe.
The repayment includes a significant premium on some holdings. Bloomberg noted that xAI’s $3 billion in high-yield bonds are expected to be redeemed at around $1.17 on the dollar—a substantial markup that reflects the fact the debt wasn’t originally scheduled to be paid off for at least another two years.
What remains unclear, per the report, is where the capital for these massive repayments is coming from. Neither company has disclosed its funding sources.
Paying down debt ahead of schedule typically requires compensating investors with a penalty on top of the interest they would have earned over the original term. Some of this debt has been on the books for years, though portions are less than a year old and carry penalties, Bloomberg added.
The repayment plans cap a series of dizzying corporate moves involving Musk’s empire. In February, SpaceX acquired xAI in a blockbuster deal that valued the AI startup at $250 billion, giving the aerospace company greater flexibility to restructure xAI’s capital. SpaceX itself is preparing for an initial public offering later this year, and Musk shook up xAI’s management last month in advance of that milestone.
The web of transactions dates back further. xAI acquired X in 2025, inheriting $12 billion of the social media platform’s debt in the process. Morgan Stanley then led a $5 billion debt package for xAI, sources previously told Reuters. And just this January, xAI raised a staggering $20 billion in a Series E funding round.
X and xAI did not respond to requests for comment. Morgan Stanley declined to comment about.
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