Elon Musk borrowed $500 million from SpaceX at interest rates as low as 1%, used the rocket company to bail out a struggling solar venture, and most recently had SpaceX swallow his cash-burning AI lab, according to a New York Times investigation published Friday.<\/p>\n
The report lands six weeks before SpaceX is expected to hit the road with the largest IPO in history.<\/p>\n
What The NYT Documented <\/p>\n
Musk pulled three loans totaling $500 million from SpaceX between 2018 and 2020, at rates that ranged from under 1% to nearly 3%, according to the Times.<\/p>\n
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The prime rate sat closer to 5% for most of that period. Under the 2002 Sarbanes-Oxley Act, public companies cannot lend to senior executives. SpaceX could because it is private.<\/p>\n
SpaceX also lent Tesla Inc. $20 million during the 2008 crisis, per Musk\u2019s own earlier comments. It injected $255 million into SolarCity in 2015 when the debt carried a high default risk.<\/p>\n
And this year, SpaceX acquired xAI after Musk said the AI venture was \u201cnot built right.\u201d At least seven xAI co-founders have since quit, and Musk said the venture was \u201cbeing rebuilt from the foundations up.\u201d<\/p>\n
Law professor Ann Lipton told the Times the arrangements were \u201cconflicted transactions\u201d and a \u201chazard\u201d of investing with Musk.<\/p>\n