A New York Times investigation published April 24 reveals that Musk borrowed $500 million from SpaceX at below-market rates between 2018 and 2020, while also directing the rocket company to bail out Tesla, SolarCity, and ultimately acquire xAI , arrangements that were possible only because SpaceX has never had public shareholders to answer to.
In January 2018, Elon Musk needed $100 million. He did not call a bank. He called SpaceX. Over the next three years, the company he founded and controls gave him three separate loans totaling $500 million, at interest rates ranging from less than 1% to just under 3%, according to internal documents obtained by The Times. The prime rate for highly creditworthy borrowers at the time was approximately 5%. Had Musk borrowed at even 4%, he would have paid roughly $40 million in interest over the loan period. He paid approximately $14 million. The difference , around $26 million , is not a rounding error. It is a subsidy, extended by a company he controlled, to himself. By the end of 2021 he had repaid the full principal.
The personal loans are the headline, but the investigation's more structurally significant findings concern how SpaceX was used to support Musk's other businesses during periods of financial distress. After Tesla ran into severe cash flow problems following the 2008 financial crisis, SpaceX provided a $20 million loan to the electric vehicle company , Musk later claimed this was repaid. Nearly a decade later, when SolarCity, a solar panel manufacturer founded by Musk's cousins and in which Musk was both a major shareholder and board chairman, was heading toward what credit agencies rated as a high probability of default, SpaceX purchased $255 million in SolarCity bonds. Internal SpaceX rules prohibited investments in junk-rated securities. The rules were overridden. Had SolarCity gone bankrupt, those bonds could have been worthless.
More recently, SpaceX acquired xAI, Musk's artificial intelligence startup, absorbing a money-losing operation into the rocket company's balance sheet. At the time of the SpaceX-xAI combination announced in early 2026, SpaceX was valued at approximately $1 trillion and xAI at $250 billion. The merger created a structure where SpaceX's cash-generating satellite internet business, Starlink, provides a financial foundation for an AI operation that has not reached profitability. "It's a conflict of interest," Ann Lipton, a law professor at the University of Colorado at Boulder, told The Times. She noted that such conflicts are "an inherent risk" of investing in the projects of someone simultaneously running multiple companies.
\h2>Why Being Private Made It All Possible
Every transaction described in the NYT investigation was possible for the same reason: SpaceX has never been a public company. The Sarbanes-Oxley Act, passed in 2002 in the wake of Enron and WorldCom, prohibits public companies from extending loans to their executive officers and directors. The reasoning is straightforward , a board approving a loan to its own CEO cannot provide the same objective credit assessment that a bank would, and the conflicts of interest involved can damage the company at the expense of outside shareholders. Private companies face no equivalent statutory prohibition. Their boards are accountable only to their investors, who are sophisticated institutions and individuals who understood the terms of their investment, including the power concentration at the top.
This is the governance structure that SpaceX is now preparing to leave. The company has been working toward an IPO, with Musk reportedly requiring banks advising on the offering to purchase Grok AI subscriptions as a condition of winning the mandate, according to earlier NYT reporting. SpaceX took out a $20 billion bridge loan in recent weeks to refinance existing debt ahead of the filing, and the company now carries approximately $23 billion in total debt, a figure that has grown substantially as Starlink expansion, Starship development, and the xAI acquisition have consumed capital. The IPO context is the reason the NYT investigation's timing matters: potential public shareholders are being handed a detailed account of how the company has been used as a financial instrument for its founder's personal benefit and ecosystem, before they are asked to buy in.
The Broader Pattern and What It Means for Founders
Musk is not unique in using private company structures to create flexibility that public markets would restrict. What distinguishes the SpaceX case is the scale , $500 million in personal loans, $255 million in related-party bond purchases , and the degree to which the company functioned as a backstop for an entire constellation of ventures. The investigation also surfaces an ongoing pattern at Tesla, where Musk has long pledged his Tesla shares as collateral for personal bank loans, a practice that Tesla's board has repeatedly tightened rules around because a forced share sale by lenders during a stock decline could trigger the kind of downward spiral that harms all shareholders.
For founders and startup investors, the SpaceX story illustrates something the governance literature has documented for decades: the governance gap between private and public companies is not merely regulatory. It is a meaningful difference in who has the power to stop a founder from treating a company's capital as an extension of their personal balance sheet. Private investors who backed SpaceX in 2018 were also backing Musk's personal loan facility at sub-1% rates. Whether they knew that at the time is a question the IPO prospectus may eventually need to address.
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