So he can use the funds he raised for xAI to pay out the lenders for the initial Twitter purchase? Otherwise the lenders are just getting xAI stock (all stock deal) which I assume is illiquid?

A stock ponzi scheme to keep him afloat? Soon he will start a new venture and use that venture to save the previous venture and so on. Maybe a robot clothing company because robots shouldn't be naked.

Next step is have SpaceX buy xai

this here is the most logical step

The debt goes to the merged company and so can be serviced or retired using the funds of the whole company.