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Relativity Space reveals plans to rapidly upgrade 3D-printed Terran 1 rocket
Relativity Space has announced that it will only launch the first version of its small Terran 1 rocket a handful of times before upgrading the vehicle in ways that will aid work on a much larger, fully reusable rocket.
Relativity co-founder and CEO Tim Ellis revealed the news in a recent interview, explaining that while the original Terran 1 rocket is still an integral part of the company’s vision and success, it will mainly serve as a bridge to the larger and more capable Terran R – a rare rocket with the potential to compete head-to-head with SpaceX’s Falcon 9.
“We’ve always envisioned Terran 1 being a development platform,” stated Ellis in an interview with Ars Technica. The Terran 1 rocket, which is thrust into orbit using nine proprietary Aeon-1 engines is designed to carry payloads into Low Earth Orbit (LEO). The first launch of Terran 1 is anticipated to take place by the end of 2022, with Ellis stating that Relativity is “definitely launching this year.” Terran 1’s first launch won’t carry payloads, indicating its experimental nature, but it will be serving as the startup’s first orbital launch attempt.
Assuming the rocket’s debut is mostly successful, Terran 1’s second mission will carry a “Venture Class Launch Services” small satellite payload for NASA. The third and final mission for the first version of Terran 1 will also carry payloads, though Relativity has yet to reveal its customer(s).
Once completed, Ellis says Relativity will shift its focus away from the Aeon-1 engine setup on Terran 1’s booster. Instead, they will remove the nine Aeon-1 engines from the vehicle and replace them with a single 135-ton-thrust (~300,000 lbf) Aeon-R engine – seven of which will eventually power Terran R’s reusable booster.
When asked why the startup didn’t simply start with the Aeon-R engine, Ellis noted that developing a booster with nine smaller Aeon-1 engines was “definitely not the optimum choice in hindsight to get to orbit as simply and quickly as possible for the Terran 1 program.” He added, “But it’s been part of our plans to do a much larger reusable rocket for a long time. So we chose to do liquid oxygen and liquid methane engines, as well as the nine-engine configuration on Terran 1 so that we could learn as a company how to do something that complex early on before we had to go build this 20,000-kilogram payload-to-orbit vehicle.”
There are many benefits that come from using the single Aeon-R engine on Terran 1, including reduced cost, processes, and more capable rockets. By scaling down the number of engines from nine Aeon-1s to one Aeon-Rs, they are also scaling down the number of turbopumps, which will reduce labor and cost. The Aeon-R engine, seven of which will power the Terran R rocket, will also produce nearly ~300,000 pounds of thrust. This will provide the company with more capable small launch vehicles.
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Ultimately, Relativity’s goal is to launch Terran R, a much larger, more powerful, and (in theory) fully-reusable rocket. Ellis stated that both the first and second stages of Terran R will be reusable, potentially allowing the rocket to directly compete with Falcon 9 – and maybe even the company’s fully-reusable Starship. SpaceX’s workhorse rocket has successfully launched 142 times and the company appears to be more confident in it than ever before. In 2022 alone, SpaceX hopes to launch an average of one Falcon rocket per week.
Despite the fact that SpaceX successfully landed its first Falcon booster in 2015 and reused a booster on a commercial launch in 2017, traditional competitors like Arianespace and ULA have done little to respond and continue to develop new rockets – Vulcan Centaur and Ariane 6 – that are fully expendable, substantially more expensive than SpaceX’s offerings, and still without a clear path to reusability. Alongside Blue Origin’s New Glenn vehicle and Rocket Lab’s Neutron, Relativity’s Terran R rocket may actually be able to compete with Falcon 9.
Ellis further revealed that Terran R already has at least one signed customer, with many others expressing interest behind the scenes. Though the company’s official timeline is incredibly ambitious, Relativity says Terran R could launch as early as 2024, giving the company less than three years to develop the giant rocket from scratch.
It is still unclear how either stage of Terran R will be recovered, nor how the rocket will integrate into the already existing launch facilities being built for Terran 1 at the Cape Canaveral Space Force Station’s (CCSFS) LC-16 pad. Nonetheless, Ellis and the entire Relativity team seem determined to deliver on their promises. Ellis didn’t shy away from bold and undeniable claims, either, stating that “we are definitely launching this year.” “I have no doubt about that…at this point, barring an act of nature or something going seriously wrong in stage testing.”
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SpaceX COO Gwynne Shotwell outlined ambitious plans for Starlink Mobile during the company’s August 4 Earnings call, signaling a direct challenge to U.S. wireless giants like AT&T, T-Mobile, and Verizon.
Shotwell noted that the three companies generate roughly $600 billion in combined annual revenue. “I anticipate us to be able to acquire quite a few of their customers because I think our service will be better,” she said. “We will eliminate dead zones leveraging the satellites in orbit. It will be better during any natural disaster… I’m quite excited about Starlink Mobile.”
SpaceX President & COO Gwynne Shotwell on @Starlink Mobile and its impact on Verizon, AT&T and T-Mobile:
“Roughly, between them, $600 billion a year. I anticipate us to be able to acquire quite a few of their customers. Our service will be better. We will eliminate dead zones… pic.twitter.com/UYZUkrGc0L
— Sawyer Merritt (@SawyerMerritt) August 4, 2026
SpaceX intends to combine its satellite constellation with terrestrial infrastructure. The company has acquired about 65 MHz of spectrum from EchoStar and plans to deploy next-generation Starlink Mobile satellites in 2027, with upgraded service targeted for the end of that year.
Shotwell described the enhanced network, leveraging more satellites and spectrum, as potentially “100 times better” than the current direct-to-cell offering, which already supports basic texting and app-based voice/video in coverage gaps through partnerships. She also indicated plans for low-cost cellular base stations that could integrate with existing Starlink dishes, creating a hybrid system for broader capacity in urban, suburban, and rural areas.
For the general public, Starlink Mobile promises significant advantages. Satellite connectivity can fill gaps where traditional cell towers fail, delivering service in remote locations, mountains, or during outages caused by storms, wildfires, or infrastructure damage—conditions in which ground networks often collapse.
Users could enjoy more consistent coverage without relying solely on dense tower builds, potentially at competitive prices as SpaceX scales. The hybrid approach aims to support full mobile services, including higher-speed data, while working with unmodified smartphones over time.
These developments revive long-standing but unfounded rumors of a Musk-developed “Tesla phone.” Speculative claims of a “Pi Phone” or similar device with built-in Starlink connectivity have circulated for years on social media, often featuring fabricated images and details. Elon Musk has repeatedly denied any such plans, stating Tesla has no intention of entering the smartphone market unless forced by extreme circumstances with app stores.
No official product, filings, or development announcements have ever materialized; the rumors remain hoaxes.
The announcement quickly pressured telecom stocks. Shares of AT&T, Verizon, and T-Mobile fell between roughly 2 and 4 percent in after-hours and premarket trading as investors weighed the competitive threat from a hybrid satellite-terrestrial network.
While execution challenges remain—spectrum deployment, infrastructure rollout, and regulatory hurdles—Shotwell’s remarks mark SpaceX’s clearest signal yet of entering the consumer mobile market as a full competitor.
Venture capitalist Chamath Palihapitiya has cautioned investors shorting SpaceX shares, drawing a direct parallel to the intense short-selling pressure Tesla faced in its early public years.
Responding to reports of elevated short interest in the newly public rocket, satellite, and AI company, Palihapitiya noted that similar dynamics played out with Tesla, where aggressive short sellers ultimately “went broke.”
SpaceX (NASDAQ: SPCX) went public on June 12, 2026, in the largest IPO on record, pricing at $135 per share. Shares quickly surged to an all-time high of $225.64 just days later, briefly implying a valuation exceeding $2 trillion. The stock has since retreated sharply amid valuation concerns, lockup expiration fears, and broader market dynamics.
By early August, it traded near $108–$125, representing a roughly 50 percent decline from the peak and bringing the market capitalization closer to the $1.5–1.7 trillion range. On August 4, shares closed up more than 9 percent at $125.33 ahead of earnings before facing pressure in after-hours and premarket trading.
Short interest has climbed dramatically. According to S3 Partners data widely cited in market reports, short positions reached approximately 219.3 million shares by late July, about 34 percent of the limited public float of roughly 640 million shares, and represented a notional value of around $24.6 billion.
Utilization of shares available to borrow hit 95 percent, with borrow fees rising. This level of shorting exceeded the dollar value of short bets against Tesla at the time and built rapidly ahead of two catalysts: the company’s first post-IPO earnings and an August 6 lockup expiration that could free up to 911.5 million additional shares.
CEO Elon Musk has issued warnings of his own. In mid-July, as short interest approached one-third of the float, he posted that “the survival probability of firms who maintain a significant short position in SpaceX over time is very low,” reiterating his view that the company could ultimately be worth more than Earth if it achieves its goals.
On August 4, just before earnings, Musk responded to the latest short-interest data by saying, “I try to warn them, but they just double down.”
SpaceX delivered its first quarterly results as a public company after the close on August 4. Second-quarter revenue rose 92 percent year-over-year to $7.8 billion, beating consensus estimates near $6.8–6.9 billion.
The net loss narrowed to $541 million, or 9 cents per share, better than the roughly 23–24 cent loss expected. Starlink/connectivity contributed about $4.3 billion (up 66 percent), while the AI business generated $2.6 billion (up roughly 250 percent). Capital expenditures were heavy at $18.4 billion, largely tied to AI infrastructure. Management projected a $100 billion annualized revenue run rate by year-end 2026 and outlined a path toward $1 trillion in annual revenue by 2030.
The combination of Chamath’s historical reminder, Musk’s repeated alerts, and the company’s ambitious growth targets underscores the high-stakes debate surrounding SPCX. Short sellers are positioned for near-term supply pressure from the lockup, while long-term bulls point to Starlink scale, Starship progress, and AI compute expansion as reasons the bears may ultimately face the same fate as many early Tesla skeptics.
Investor's Corner
SpaceX and Nvidia team up on Musk’s orbital AI bet
SpaceX revealed a new Nvidia satellite partnership, then Musk pledged an exclusive Nvidia hardware commitment.
SpaceX and Nvidia are now working together on the hardware that will power Musk’s orbital data center ambitions. SpaceX announced on X on Tuesday that it is partnering with Nvidia to design the compute payload for Starmind AI1, the first satellite in a planned constellation built to run AI workloads directly in orbit. Each Starmind satellite will carry Nvidia’s Rubin GPUs and Vera CPUs, according to the post, which included renderings of the payload design.
The announcement landed hours before SpaceX’s first earnings call as a public company, where Musk went further, saying the company has committed to building its AI infrastructure exclusively on Nvidia hardware. “We think the Vera Rubin architecture is the best architecture. We think it’s the best AI computer, and we greatly value our close cooperation and partnership on many levels with Nvidia,” Musk told investors on the call,. “So we’re exclusive to Nvidia.”
Musk said SpaceX plans to deploy Nvidia’s Vera Rubin NVL72 rackscale system, codenamed Kyber, both on the ground and in space. He set a target of 2 gigawatts of compute capacity online by the end of this year, scaling to roughly 10 gigawatts by the end of 2027.
SpaceX’s newest Starmind will make earth data centers obsolete
Starmind has been in development since Musk confirmed the name in June, following an xAI trademark filing that tipped off the project before SpaceX made it official. The idea is massive in scope and instead of moving data down to ground based servers, satellites equipped with onboard processors and large solar arrays would compute AI workloads in orbit and beam results back to Earth. SpaceX has already filed with the FCC for a constellation of up to one million satellites to support the effort, citing constant solar power and the absence of zoning restrictions as advantages over terrestrial data centers.
The Nvidia exclusivity marks a shift in tone from just two weeks ago, when Musk was busy knocking down a report that SpaceX had ordered $52 billion worth of Nvidia GPUs through Foxconn, calling it fake news at the time. The dollar figure in that rumor may have been wrong, but the underlying direction seems correct. SpaceX’s AI division already leases Colossus compute capacity to Anthropic and Google, and Tuesday’s earnings report showed AI revenue climbing sharply as those deals ramp up.
Nvidia shares rose roughly 3% in Tuesday trading on the news, while SpaceX stock climbed nearly 9% during the day before giving back gains after hours as investors digested the earnings report’s capital spending figures.
SpaceX is coming for wireless giants with Starlink Mobile
SpaceX shorts get warned by Musk ally, echoing Tesla’s early struggles
