The New York Times: Musk treats SpaceX as a personal bank, lending out $500 million at ultra-low interest rates

The New York Times investigation revealed that Musk took three personal loans totaling $500 million from SpaceX, which he served as CEO, between 2018 and 2020, with interest rates far below market levels, sparking criticism over legal and corporate governance issues.
(Background summary: Bloomberg: SpaceX to price on 6/15, employees have already pre-allocated stock vesting periods, the largest IPO in history with a valuation exceeding $2 trillion)
(Additional background: Musk SpaceX IPO new developments) reports that discussions have been held with Bank of America, Goldman Sachs, and other major banks regarding listing details, with fundraising potentially exceeding $30 billion).

Table of Contents

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• The role of SpaceX as a private treasury
• IPO countdown: this path will end after going public
• Governance expert: “This is the core risk of a multi-company empire”

With only about six weeks remaining before SpaceX’s anticipated record-breaking IPO, a report by The New York Times has ignited public debate: Elon Musk took three personal loans from SpaceX, where he is CEO, totaling $500 million between 2018 and 2020, with interest rates so low they are almost symbolic: less than 1% at the minimum and just under 3% at the maximum, far below the commercial benchmark rate of about 5% during the same period.

The NYT investigation pointed out that if Musk had borrowed at market rates, he would have paid about $40 million more in interest; in reality, he paid only about $14 million. In other words, SpaceX saved this billionaire over $26 million in capital costs.

All loans were repaid in full, including interest, by the end of 2021.

SpaceX’s role as a private treasury

The report notes that this is not the first time SpaceX has acted as a rescue squad for Musk’s business empire. The NYT has compiled a “blood transfusion list” spanning nearly two decades:

• During the 2008 financial crisis, SpaceX provided a $20 million loan to Tesla, offering a lifeline when Tesla was on the brink of bankruptcy.
• Between 2015 and 2016, SpaceX violated internal policies by purchasing $255 million in bonds of another Musk-affiliated company, SolarCity, which was facing default risks at the time.
• Additionally, SpaceX purchased 1,279 Tesla Cybertrucks, widely interpreted as a strategic move to boost Tesla’s sales figures.

The report concludes that perhaps the most controversial aspect of this acquisition is in 2025: SpaceX will fully absorb Musk’s ongoing money-burning AI company xAI, valued at about $80 billion, with the combined X platform valued at approximately $33 billion.

IPO countdown: this path will end after going public

The NYT investigation was published at a particularly sensitive time. SpaceX is scheduled to go public this summer, with an estimated valuation between $1.75 trillion and $2 trillion, and a fundraising scale of about $75 billion. The S-1 filing is expected to be submitted in May. If successful, this will be the largest IPO in U.S. history.

The report cites legal background indicating that once SpaceX goes public, under Section 402 of the Sarbanes-Oxley Act, publicly traded companies are explicitly prohibited from providing personal loans to senior executives. In other words, such practices will become illegal after the IPO, and the “fast track” financing methods Musk has used in the past will be officially closed.

Governance expert: “This is the core risk of a multi-company empire”

The report quotes Ann Lipton, a law professor at the University of Colorado Boulder, who directly criticizes: “These are all conflicts of interest transactions. That’s exactly why investing in someone who manages multiple companies is extremely risky.” Michael Garland, assistant CFO of the New York City retirement fund, also opposes Musk using Tesla stock as collateral, believing it makes it difficult to separate company and personal financial risks.

In the same investigation, another NYT article revealed that Musk asked five IPO underwriting banks—Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, and Morgan Stanley—to subscribe to his xAI chatbot Grok as a condition for underwriting, with some banks agreeing to pay millions of dollars annually in subscription fees.

The outside world has dubbed this “Grok subscription extortion,” further deepening market suspicions of Musk’s interest transfers among multiple enterprises.