SpaceX’s $40 billion AI debt plan faces market turmoil. Can investors stomach the growing borrowing risks?

SpaceX’s efforts to finalize a $40 billion off-balance-sheet debt structure for its artificial intelligence buildout have been roiled by recent market turmoil that’s driven up sector-wide borrowing costs and complicated price talks.

The transaction under discussion is designed to fund the purchase of Nvidia Corp.’s chips through a special purpose vehicle, keeping the liabilities off SpaceX’s own books and safeguarding its investment-grade ratings, according to people familiar with the matter.