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Medtronic opens up about Elon Musk and SpaceX’s role in fight against COVID-19
Earlier this year, Elon Musk announced on Twitter that SpaceX would be working with medical device firm Medtronic to help the company produce its most advanced ventilators, which are pivotal in the battle against the pandemic. Details about the two companies’ collaboration have been quite slim since then, with Musk simply noting that SpaceX was producing valves for Medtronic.
In a recent post, Medtronic opted to share some key insights about its work with Elon Musk and his private space enterprise. The medical device maker’s story highlighted the value of Musk’s Silicon Valley-style approach to his companies, which emphasizes quick innovation that’s directed towards the development of real-world, practical solutions in the shortest time possible.
Medtronic’s Puritan Bennett 980 Ventilator Series is the company’s most advanced ventilator. It allows patients to breathe naturally through a series of innovative breath delivery technologies. It’s also fitted with a unique ventilator assistance feature that allows the machine to continue delivering ventilatory support even in the event of certain system failures. The flagship machine is built in Medtronic’s facility in Galway, Ireland, and it has become a staple in numerous hospitals.
In a typical year, Medtronic’s Galway plant could produce about 7,500 valves for its flagship ventilator. But with COVID-19 spreading across the globe, the need for ventilators increased rapidly and significantly. Medtronic promptly increased the production of its ventilators, and by mid-March, the Galway plant had raised its output by 40%. But it was not enough. Building ventilators is a complex process, after all, and the machines require advanced components that are difficult to manufacture.
One of these components is a proportional solenoid (PSOL) valve, a highly complex piece of machinery that controls the flow of air and oxygen inside the machine. The PSOL valve consists of over 50 parts, and each must be manufactured with surgical precision, with some components having tolerances as thin as a strand of hair. Medtronic’s most advanced ventilator used three of these PSOL valves per unit, and as noted by Medtronic Engineer Matt Phillips, the medical device firm was pretty much at a loss about how it could meet the increasing demand for its products.
And then Elon Musk called, and he came with a unique, interesting proposal.
Musk’s private space firm, SpaceX, which made its mark in the industry with its reusable rockets and its Crew Dragon spacecraft, offered to make PSOL valves for Medtronic. SpaceX proved to be the perfect partner for the medical device maker, as it already had a division that designs and manufactures valves for its rockets. The private space enterprise’s engineers were top-notch, and they had the technical expertise to stand up to the challenge. And with that, the two companies’ collaboration began.
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In a display of its quick, Silicon Valley-style approach to problem-solving, SpaceX did not waste any time. COVID-19 was not letting up, and neither was Elon Musk’s private space enterprise. SpaceX promptly converted part of its rocket factory in Hawthorne, California to produce PSOL valves with the help of Medtronic employees. To maximize mobility and speed, the team even built a PSOL valve manufacturing line on carts. Ultimately, the SpaceX and Medtronic team achieved in months what might have otherwise taken years.
“They literally turned a rocket production area into a ventilator valve manufacturing facility almost overnight,” Phillips said.
As noted by the Medtronics engineer, SpaceX did not scrimp on its talent, with some of the engineers who worked on the Crew Dragon capsule working on the Medtronic project. Quality control was extremely high, with the valves produced at the SpaceX site undergoing rigorous testing before being shipped to Galway.
“We had their best technicians. We had their best engineers. Some of the people working on this project are the very people who just launched the first private commercial crew to the International Space Station. They brought the same kind of energy to this project that they brought to putting astronauts into space,” Phillips noted.
“When it comes down to it, these ventilators are going to save lives,” Phillips said. “So every component has to be perfect. There is no room for error, which is why we put these valves through such an intensive testing protocol,” the Medtronic engineer added.
Thanks in no small part to the quick initiative of the SpaceX team, the medical equipment company now has the capability to produce 9,000 PSOL valves for Medtronic’s flagship ventilator over the next 8 to 10 weeks. That’s about the same amount of valves that Medtronic’s Galway plant produced in 2019. The Galway facility, for its part, could now operate at five times the volume of its pre-pandemic operations.
“I have never seen anything like this in my life… This project certainly changed the way I look at production, partnership, and innovation. I know that, with the right focus and the right energy, we can take what we learned from this project and apply it to other challenges that come our way,” Phillips remarked.
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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.”
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.
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.
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.
Tesla headlights have caused a recall of over 20,000 of the company’s two most popular vehicles, the Model 3 and Model Y, due to the low-beam bulb exceeding the maximum allowed intensity according to federal standards.
Tesla initiated the recall with the National Highway Traffic Safety Administration (NHTSA) this morning, stating that the low-beam output “exceeds the maximum allowed intensity in the outer upper-right and outer upper-left areas of the 10U and 90U zone, as prescribed in FMVSS No. 108.”
Tesla sourced the impacted headlights from Marelli Automotive Lighting, a Mexico-based company. The recall impacts 2020-2023 Model Y vehicles and 2017-2023 Model 3 vehicles. It is estimated that every VIN in this recall is impacted by the defect.
🚨 Tesla is recalling 20,349 2020-23 Model Y vehicles and 2017-23 Model 3 vehicles due to an excessively bright headlamp low beam.
Currently, there is no remedy plan in place, as it is still being developed. pic.twitter.com/y34cIO2U0B
— TESLARATI (@Teslarati) August 11, 2026
Typically, Tesla would remedy recalls of this nature through an Over-the-Air software update, which has been a major focus of criticism by the company and its supporters because the NHTSA still refers to it as a “recall,” even though it requires no action by the vehicle owner. The fix is shipped over the internet and downloaded to the car.
However, there appears to be a potentially different solution for this problem. Tesla has not developed a remedy for this issue, so it could potentially be on the way. The big issue appears to be the fact that these recalled lamps are out of production, and this is an old body style for both vehicles. The headlights and front-end designs are completely different.
Tesla switched to another supplier when the affected headlight design was discontinued. It plans to begin notifying owners of their remedy options by September 15.
Tesla filed a petition protesting the recall to fix the vehicles’ headlight issue, but the NHTSA denied it. Now, Tesla will come up with a solution to fix it.
Tesla has one big financial question to answer for investors: Morgan Stanley
SpaceX AI investment gamble will make it a big winner, firm says
