SpaceX credit risk gauge hits record high amid $40 billion fundraising talks

SpaceX has spent years making the impossible look routine. Bond traders, it turns out, are less easily impressed.

The company’s five-year credit default swaps climbed to a record 197 basis points on October 7, 2026. The jump followed reports that SpaceX is negotiating a fundraising round of approximately $40 billion to buy Nvidia AI chips.

What the bond market is saying

Think of a credit default swap as an insurance policy on a company’s debt. If the borrower can’t pay, the policy pays out. The more investors pay for that protection, the more worried they are about repayment.

SpaceX’s five-year CDS traded between 195 and 197 basis points on October 7. Both ends of that range mark record territory for the contract.

To put that in plain terms: protecting $10 million of SpaceX debt for a year now costs roughly $197,000. That is the highest price the market has ever charged for this particular kind of peace of mind.

The company’s cash bonds told a similar story. SpaceX’s 6.65% notes due in 2056 saw their spread widen by 12 basis points in secondary trading, reaching 238 basis points over the benchmark.

That is a notable drift from where those bonds started. At issuance, the same notes priced at a spread of 175 basis points.

Equity investors reacted too, though more gently. SpaceX shares slipped by 1% to 2% after the news broke. Nvidia’s stock, meanwhile, held steady.

The $40 billion shopping list

The financing plan was outlined in reports from the Financial Times and Bloomberg. It would reportedly be split into two pieces.

The first is $10 billion in bank loans. The second is $30 billion in investment-grade debt. Together, they would fund a large purchase of Nvidia AI chips.

Apollo Global Management is expected to lead the deal. The talks remain preliminary, however, and the financing may not close until 2027 at the earliest.

The chips would feed SpaceX’s growing push into artificial intelligence. The company has been building out Nvidia GPU clusters and has landed lucrative contracts with tech giants including Google.

A balance sheet that keeps getting heavier

As of June 30, 2026, the company reported total debt of $38.4 billion.

That figure came after a busy June. SpaceX completed a record-setting IPO that month, then quickly followed it with a $25 billion bond issuance.

Add a potential $40 billion on top of $38.4 billion, and the math changes. The company’s debt load would roughly double if the full package goes through as reported.

There is also a circular quality to the deal worth noting. Nvidia holds about 123 million shares of SpaceX, a stake valued around $21 billion at the end of June 2026.

So the chipmaker would effectively be selling hardware to a company it partly owns, financed by debt that company raises from others.

The broader worry about AI leverage

SpaceX is borrowing into a market already uneasy about how the AI boom is being financed. Investor Ray Dalio has raised alarms about rising leverage and a potential bubble forming as borrowing costs tied to AI investments climb.

What this means

For bondholders, the immediate takeaway is that SpaceX debt is being repriced, not abandoned. A spread of 238 basis points signals caution, not panic, and the planned $30 billion portion is still being framed as investment-grade debt.

For Nvidia, the stakes cut both ways. A successful SpaceX build-out could strengthen both companies and validate Nvidia’s position as the default supplier for large AI projects. If debt concerns deepen, though, Nvidia’s roughly $21 billion stake becomes exposed to the same pressures weighing on SpaceX’s credit.

The timeline also leaves plenty of room for things to change. With a close not expected before 2027 at the earliest, terms, size and structure could all shift. Markets will be watching Apollo’s role, the final split between loans and bonds, and whether SpaceX’s CDS keeps setting new records along the way.