March 2 (Reuters) – Elon Musk’s social media platform X and artificial intelligence startup xAI plan to repay in full about $17.5 billion in debt tied to the companies, Bloomberg News reported on Monday, citing people familiar with the matter.
Morgan Stanley, which is managing the debt for both companies, has been informing existing lenders that X and xAI plan to pay back everything they owe, the report said.
Bloomberg reported that xAI’s $3 billion of high-yield bonds are set to be redeemed at about $1.17 on the dollar, a premium reflecting that the debt was expected to remain outstanding for at least two years.
The companies have not revealed where the capital is coming from, according to the Bloomberg report.
When companies repay bonds ahead of schedule they typically must compensate investors with a penalty plus the interest lenders had expected to earn over the original term.
Some of the debt has been outstanding for years, though portions are less than a year old and carry penalties, Bloomberg said.
The repayment plans come after a series of major corporate moves.
SpaceX acquired xAI in February in a deal that valued the AI startup at $250 billion, giving the aerospace company greater flexibility to restructure xAI’s capital.
The rocket maker is preparing an initial public offering later this year, ahead of which Musk overhauled xAI’s management last month.
xAI acquired X in 2025, inheriting $12 billion of the social media company’s debt in the process.
Morgan Stanley subsequently led a $5 billion debt package for xAI, sources familiar with the matter told Reuters. In January, xAI raised $20 billion in a Series E funding round.
X and xAI did not respond to requests for comment. Morgan Stanley declined to comment. Reuters could not independently verify the Bloomberg report.
(Reporting by Anhata Rooprai in Bengaluru; Editing by Alan Barona and Tasim Zahid)
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