News
Ex-SpaceX engine expert to help design rockets built for launch on world’s largest jet
Stratolaunch, an aerospace company funded by Microsoft-made billionaire Paul Allen to build the world’s largest flightworthy aircraft, has announced a decision to build its own liquid-fueled rockets, to be air-launched from the aforementioned mega-plane.
Targeting an inaugural launch of the first version of the rocket – currently nicknamed “Kraken” – as early as 2022, Stratolaunch has chosen Jeff Thornburg, formerly SpaceX’s Vice President of Propulsion Engineering and the father of the company’s Mars-focused Raptor engine, to lead its foray into in-house rocket propulsion development and manufacturing.
Stratolaunch has confirmed what most people have long speculated: it’s developing its own launch vehicles for its air-launch system, including a reusable space plane that could eventually carry people. pic.twitter.com/nF9lKVe4xk
— Jeff Foust (@jeff_foust) August 20, 2018
But first: building the world’s largest aircraft
Stratolaunch’s first task at hand, however, is to begin flight-testing the largest (hopefully) operational aircraft in history, a prerequisite for the company’s longer-term orbital rocket and spaceplane aspirations. Nicknamed “Roc” after a mythical (and fictional) bird so large it could carry an elephant, the plane certainly lives up to its namesake. Featuring a full six of the same engines that power Boeing’s once-record-breaking 747 airliner and a wingspan that could easily fit three smaller 737 airliners with room to spare, it is genuinely difficult (if not impossible) to successfully convey the sheer scale of Roc outside of witnessing it in person.
Stationed in California’s Mojave Desert, the aircraft’s one and only copy is, for the most part, completed and has spent the brunt of 2018 conducting runway taxi tests, hopefully culminating in an inaugural flight test later this year or early next year. Designed to lift orbital-class rockets weighing as much as 250 metric tons (550,000 lb) to an altitude of at least 9100 meters (30,000 feet), the primary benefit of using aircraft as launch platforms derives from the simple fact that the atmospheric density at 30,000 feet is more than three times less than that at sea level. Similar to aircraft, rocket performance dramatically improves as atmospheric density decreases: less atmosphere means lower drag and pressure.
Rockets that launch from sea-level have to grapple with the difficulties of Earth’s relatively thick atmosphere at that height, with major launch events like “Max-Q” being big concerns almost solely because the dense air exerts major forces on launch vehicles and demands extreme measures like throttling down booster engines (very inefficient) and optimizing structures for aerodynamic efficiency despite the fact that rockets spend very little time operating in a significant atmosphere.
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A launch pad without a rocket (sort of)
However, the simple fact of the matter is that billionaire Paul Allen’s colossal aircraft essentially does not have a single air-launched rocket in the world that can properly take advantage of its capabilities. Originally sized and designed with an air-launched version of SpaceX’s Falcon 9 in mind, that relationship folded amicably after roughly a year (2012), at which point SpaceX realized it would need to almost completely redesign a unique variant of Falcon 9. Your author will readily admit that they have admired the insanity of such a massive plane while still severely doubting its practical utility.
Thankfully, it appears that Allen is adamantly opposed to the idea that Stratolaunch is some silly whim to build the world’s largest plane. Rather, he is exceptionally reserved and pragmatic when discussing the aerial launch platform, according to a recent and extensive interview by Wired Magazine’s Steven Levy.
“Allen isn’t one to show exuberance, and when he speaks about the plane he focuses on its future utility. ‘When you see that giant plane, it’s a little nutty,’ he says. ‘And you don’t build it unless you’re very serious, not only about wanting to see the plane fly but to see it fulfill its purpose. Which is getting vehicles in orbit.’ – Paul Allen, 2018
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- Stratolaunch’s Roc shown with a triplet of Orbital ATK Pegasus XL rockets. (Vulcan Space)
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- Back in 2012, SpaceX briefly entertained the idea of a Falcon 9 variant optimized for air-launch, potentially including crew rating the rocket down the road. (Stratolaunch/Dynetics)
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- The Roc is inconceivably vast. (Stratolaunch)
Currently, Orbital ATK’s (now Northrop Grumman Innovation Systems) air-launched Pegasus XL rocket is the only “customer” in the world that can realistically use Stratolaunch as a launch platform, not exactly an impressive or sustainable launch vehicle with a maximum performance of less than 450 kg (~1000 lbs) to low Earth orbit for an incredible ~$40 million per (expendable) flight.
To answer that call and ensure Stratolaunch’s utility, the company reportedly began seriously considering its own in-house expendable and reusable rockets and propulsion systems sometime in 2016, plans that have since grown concrete and been publicly embedded into Stratolaunch’s overarching mission. Nicknamed “Kraken” after the mythical sea monster, the company hopes to develop an initially expendable rocket system capable of launching 3400 – 6000 kg (~7500 – 13250 lbs) into low Earth orbit with single booster and triple booster variants. Further down the line, Stratolaunch is eyeing the design and production of a fully and rapidly reusable orbital spaceplane, potentially including a version that would carry astronauts into space.
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- A concept video produced by Stratolaunch shows the Roc launching a Kraken rocket. (Stratolaunch, via Wired)
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- A concept video produced by Stratolaunch shows the Roc launching a Kraken rocket. (Stratolaunch, via Wired)
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- A concept video produced by Stratolaunch shows the Roc launching a Kraken rocket. (Stratolaunch, via Wired)
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- SpaceX’s subscale Raptor engine has completed more than 1200 seconds of testing in less than two years. (SpaceX)
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- BFS (circa 2017) shows off its complement of SL and Vacuum Raptor engines. SpaceX is moving back to something similar to this. (SpaceX)
Normally, one might simply roll their eyes at yet another startup touting small(ish) expendable rockets with first launches no earlier than the early 2020s – the market is getting to be absurdly and impossibly overcrowded at this point. However, Stratolaunch differs for one fundamental and reason: they have placed ex-SpaceX propulsion executive and expert Jeff Thornburg at the helm of the company’s freshly public rocket propulsion wing. While at SpaceX, Mr. Thornburg spent all but one of his five years with the company (2011-2015) single-mindedly focused on the development and engineering of all aspects of the Raptor rocket engine, a next-generation propulsion system designed to enable SpaceX’s sustainable colonization of Mars.
Raptor is an exceptional rocket engine thanks in no small part to Thornburg’s brilliance as a propulsion engineer, and that same brilliance and half-decade of experience at the most successful rocket startup in existence could ultimately prove a massive boon for Stratolaunch’s otherwise interesting but unexceptional expendable rocket concepts.
Put simply, under Jeff Thornburg’s direction and with access to founder Paul Allen’s considerable wealth, Stratolaunch is undoubtedly worth keeping a close eye in the future, both far and near.
For prompt updates, on-the-ground perspectives, and unique glimpses of SpaceX’s rocket recovery fleet check out our brand new LaunchPad and LandingZone newsletters!
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
