SpaceX is currently in discussions regarding a $40 billion off-balance-sheet debt financing strategy. The purpose of this plan is to acquire Nvidia chips via a special purpose vehicle, thereby bolstering its artificial intelligence (AI) business expansion. By opting for this approach, SpaceX aims to keep the debt off its own balance sheet, which would help it preserve its investment-grade credit rating.

However, the recent turbulence in the AI sector's market has driven up borrowing costs for companies operating in this field, making the pricing negotiations more complex. At present, banks spearheaded by Goldman Sachs are engaged in talks about the financing plan with investors led by Apollo. There are also plans for Atlas SP, which is backed by Apollo, to oversee the management of this special purpose entity. Moreover, Pimco is contemplating whether to join the initiative.

Previously, the yield on the subordinated debt that both parties had discussed fell within the mid-8% to 9% range. Nevertheless, the recent market volatility has prompted investors to reassess the pricing. As a result, negotiations are still in progress.

It's worth noting that xAI once tried to raise up to $20 billion in off-balance-sheet debt through a sale-leaseback arrangement. However, auditors considered this attempt a failure, and roughly $13 billion of the debt was ultimately counted as SpaceX's own liability. The current financing structure is designed to prevent a recurrence of such a situation.