News
The Boring Company’s garage-elevator site takes shape ahead of Dec 18 tunnel opening
The Boring Company continues to make progress on the garage elevator prototype in its Prairie Avenue work site, located roughly at the halfway point of the tunneling startup’s 2-mile test tunnel in Hawthorne, CA. As the days trickle down towards the test tunnel’s unveiling on December 18, The Boring Co. appears to be digging deep in order to ensure that its projects in the area are making good progress.
On the site of the tunneling startup’s garage-elevator prototype, work continued despite last week’s rains. Teslarati photographer Pauline Acalin was in the area last Thursday, and she was able to snap some pictures of workers near the site. Returning to the elevator’s location this Monday, it was evident that work progressed, as evidenced by the disappearance of a massive structure previously set up beside the garage-elevator’s pit.
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- The Boring Company’s garage-elevator site as of 12/06/2018. (Credit: Pauline Acalin)
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- A structure believed to be an elevator shaft was built beside the opening of the Prairie Ave. garage-elevator site. (Credit: Pauline Acalin)
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- A structure believed to be an elevator shaft was built beside the opening of the Prairie Ave. garage-elevator site. (Credit: Pauline Acalin)
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- The Boring Company’s garage-elevator site as of 12/10/2018. (Credit: Pauline Acalin)
A massive structure believed to be an elevator shaft is believed to have been installed in the garage-elevator as of 12/10/2018. (Credit: Pauline Acalin)
Images taken near the end of November showed a massive structure being set up by The Boring Company beside the pit where it extracted the segments of Godot, its first tunnel boring machine. While the Boring Company did not identify or confirm the purpose of the structure, its size and height suggested that it was a shaft for the underground elevator being built on the site, where vehicles will be lifted out from the test tunnel.
Considering that the elevator shaft was nowhere to be seen as of Monday, it appears safe to assume that the structure has already been installed in the elevator itself. This bodes well for the project, as the structure is a key component to the Boring Company’s plans in the area. The garage-elevator, after all, is a bit different from the tunneling startup’s other projects, such the Hawthorne tunnel or the Dugout Loop, in the way that it would not be opened to the public even when it gets completed.
Instead, the structure would be used strictly for testing purposes only, with vehicles being moved from the test tunnel into the elevator, before being lifted onto the street. In a statement to Mercury News last September, Boring Company representative Jane Labanowski described the garage-elevator as an “important part of the longer-term vision the company is trying to build.” If the garage-elevator works as intended, it is not difficult to imagine The Boring Company rolling out the concept to its future stations, particularly those located near or even within residential areas.
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- The Boring Company’s garage-elevator site as of 12/06/2018. (Credit: Pauline Acalin)
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- The Boring Company’s garage-elevator site as of 12/06/2018. (Credit: Pauline Acalin)
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- The Boring Company’s garage-elevator site as of 12/06/2018. (Credit: Pauline Acalin)
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- The Boring Company’s garage-elevator site as of 12/06/2018. (Credit: Pauline Acalin)
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- The Boring Company’s garage-elevator site as of 12/06/2018. (Credit: Pauline Acalin)
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- The Boring Company’s garage-elevator site as of 12/10/2018. (Credit: Pauline Acalin)
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- The Boring Company’s garage-elevator site as of 12/10/2018. (Credit: Pauline Acalin)
Work continues on the site of The Boring Company’s garage-elevator concept. (Credit: Pauline Acalin)
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Similar to The Boring Company’s other projects, the vehicles that would be transported from the SpaceX headquarters to the elevator will be traveling through the startup’s electric skates. These skates use Hyperloop technology, and are expected to facilitate high-speed transportation from the tunnels to the garage-elevator.
The Boring Company initially announced that it would hold an opening party for its Hawthorne test tunnel on December 10, with test rides in the system being offered to the public for free the following day. In a recent announcement, though, Elon Musk stated that the test tunnel’s opening event is being moved to December 18 instead. Musk did not give a specific reason behind the delay, though considering the work still being done on some Boring Company projects like the Prairie Avenue elevator, there is a good chance that the tunneling startup is opting to refine some of its projects further before unveiling them to the public.
Elon Musk
SpaceX’s next trillion dollar bet has nothing to do with rockets, Musk tells staff
Elon Musk told SpaceX staff AI revenue will soon dwarf rockets and Starlink combined entirely.
Elon Musk told SpaceX employees this week that artificial intelligence, not rockets, will soon carry the company’s revenue. In a roughly 29 minute internal address posted on SpaceX’s X account on Tuesday, Musk said AI revenue will pass every other line of business at SpaceX “probably in September” and pull further ahead by the fourth quarter.
The numbers he gave are specific. SpaceX currently runs 1.4 gigawatts of AI compute capacity. Musk wants that at 10 gigawatts by the end of 2027, a jump he tied directly to revenue: “if we bring 10GW of AI online by the end of next year, it will be $300 billion to $500 billion a year in revenue.” He called those “big numbers,” which undersells a projection larger than what most countries produce in a year.
We made rockets reusable and are rebuilding the internet in space. The next challenge: making life multiplanetary and understanding the true nature of the universe
Watch @ElonMusk deliver a company update to @SpaceX employees pic.twitter.com/5c8rxoCQfu
— SpaceX (@SpaceX) August 11, 2026
Musk went further on where AI fits into SpaceX’s future. “Probably in four or five years, AI will be 99% of the value of SpaceX,” he told staff, adding that digital intelligence would eventually run “a trillion times” ahead of biological intelligence as computing scales. He tied that growth to the company’s founding mission, telling employees “we must win on AI, because the future is overwhelmingly AI and robots,” with the payoff meant to help fund Starship and a Mars program that increasingly runs through Terafab, the joint Tesla, SpaceX and xAI chip plant.
Elon Musk launches TERAFAB: The $25B Tesla-SpaceXAI chip factory that will rewire the AI industry
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None of this is entirely new territory. SpaceX told investors much the same story during its first earnings call as a public company on August 4, where Musk moved the company’s $1 trillion revenue target up a year to 2030 and said Starlink could someday carry a majority of the world’s internet. What the all hands video adds is a hard deadline and a specific power figure Musk had not given publicly before, along with a franker pitch to his own workforce that AI, not launch cadence, is now the thing SpaceX is betting its future on.
The AI revenue itself is not coming from SpaceX training its own models. It is largely Starlink acting as the network layer for xAI’s workloads, plus SpaceX renting out compute capacity directly, the same approach behind the roughly $16 billion the company spent on AI infrastructure in a single quarter.
Musk closed the video with a pitch aimed at recruiting and retention rather than investors, telling employees that anyone who helps SpaceX win the AI race will eventually get the chance to go to the moon or Mars themselves. Whether SpaceX can turn 1.4 gigawatts into 10 in seventeen months is the more immediate question, and one that will show up in quarterly numbers well before anyone leaves Earth.
In a new note to investors on Tuesday, Morgan Stanley analyst Andrew Percoco said that Tesla has one big financial question to answer for investors regarding its Robotaxi rollout, Full Self-Driving software, and Optimus.
Percoco said in the note that, for the most part, investors are still very positive about the direction the company is headed. However, there are some things the firm would like to see, and they have to do with financials.
Tesla (TSLA) Q2 2026 earnings results: miss on EPS, beat on revenue
Tesla bulls are more than convinced that the company’s Full Self-Driving software is proof it can develop physical AI. Financially, however, there are still some questions, especially on elevated spending, which CEO Elon Musk said would occur as the company works to roll out Robotaxi faster and continue developing its Optimus robot.
The latter two are where Tesla will have to prove progress to investors, as Percoco writes that both projects “will require clearer evidence that Robotaxi is scaling and more tangible Optimus proof points to support the ROI on elevated capex.”
Percoco said the second quarter earnings call did not change his long-term thesis of where Tesla is positioned in the AI race, which is out in front. However, there are concerns that weaker gross margins and higher R&D spend will stress financials, and that has “sharpened our (and investors’) focus on measurable progress across Robotaxi and Optimus.”
Additionally, Robotaxi still needs to be proven with more operation in existing cities while maintaining safety but improving how many rides it gives in any given time, he said. For Optimus, Percoco wrote that he is “still looking for evidence beyond commentary around SOP.”
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Morgan Stanley put Percoco in charge of covering Tesla after long-time analyst Adam Jonas transitioned to the automotive side.
Currently, Morgan Stanley has a $415 price target on Tesla and a ‘Hold’ rating on the stock. It is trading at around $330 at the time of publication, which was 2:30 P.M. on the East Coast.
SpaceX’s massive investment in AI will make it a big winner, Argus Research said after the company’s successful earnings call last week.
The firm also upgraded shares to a Buy from Hold and set a $160 price target.
SpaceX (NASDAQ: SPCX) is currently recovering from its heavy AI infrastructure investments, as it spent nearly $16 billion in Q2 alone. The company did this primarily by monetizing high-demand GPU compute capacity at a much faster pace than traditional data center economics would suggest.
Company CFO Bret Johnsen said that SpaceX would be able to pay back anything on new deployments within a year.
There are plenty of ways the company can do this:
Leasing excess compute capacity through contracts
SpaceX has already built Colossus and Colossus II, largely for its own model training. However, much of that capacity is already rented out to third parties. It already has major deals with Anthropic, Google, and Reflection AI. These partnerships are adding billions per month to SpaceX’s spreadsheet.
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High utilization driven by industry-wide scarcity
The demand for advanced AI training and inference capacity continues to exceed what is available for use. SpaceX can fill new racks quickly after they come online, so the capital deployed converts into revenue with minimal idle time.
Additionally, management and outside observers have described the new compute capital as behaving more like a cost-of-goods-sold than traditional multi-year capex, especially because of this rapid monetization pattern.
Capacity has already scaled from ~0.4 GW a year to 1.4 GW annually by the end of Q2. There are targets of more than 2 GW by year-end.
High incremental margins on the rental business once capacity is online
GPU cloud providers often operate at strong gross margins. SpaceX can monetize capacity that was already partially built or can be added efficiently. This means that incremental EBITDA margins on the rental revenue are usually high. This accelerates cash recovery relative to the gross capital outlay.
Parallel monetization of its own AI software and applications
Beyond pure infrastructure rental, SpaceX also generates revenue from Grok through subscriptions and usage, from X through ads, data, and other related services, enterprise APIs, and the planned integration of the Cursor coding tools acquisition.
These application layers ride on the same compute infrastructure and provide additional high-margin streams that could offset build-out costs. AI-segment revenue overall rose sharply to about $2.6 billion in Q2, according to Motley Fool. This was driven primarily by the infrastructure contracts, but the software side is also partially responsible.
Efficient, large-scale deployment and vertical integration advantages
SpaceX has emphasized the rapid construction of power and cooling infrastructure and favorable cost-per-megawatt economics relative to industry benchmarks in some disclosures.
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Combined with its ability to scale capacity aggressively and the fact that many contracts start generating revenue within months of capacity coming online, the effective payback compresses dramatically compared with more conventional multi-year data-center projects.
SpaceX’s dominant near-term recovery path will turn the AI clusters into a hyperscale-style compute rental business for other leading AI companies while still using a portion for internal models.
SpaceX’s next trillion dollar bet has nothing to do with rockets, Musk tells staff
Tesla has one big financial question to answer for investors: Morgan Stanley
