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US Air Force awards SpaceX $20m contract to support its biggest spy satellites

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8 years ago

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Slipping beneath the watchful eye of many skilled defense journalists, the government contracting database FPDS.gov indicates that the US Air Force awarded SpaceX more than $20 million in November 2017 to conduct a design study of vertical integration capabilities (VIC). Describing what exactly this means first requires some background.

Vertical whaaaat?

The flood of acronyms and technical terminology that often follow activities of the Federal government should not detract from the significance of this contract award. First and foremost, what exactly is “vertical integration” and why is significant for SpaceX? Not to be confused with more abstract descriptions of corporate organization (vertical integration describes one such style), integration here describes the literal process of attaching satellite and spacecraft payloads to the rockets tasked with ferrying them to orbit.

Likely as a result of its relative simplicity, SpaceX has used a system of horizontal integration for as long as they have been in the business of launching rockets, be it Falcon 1, Falcon 9, or Falcon Heavy. In order to integrate payloads to the rocket horizontally, SpaceX has a number of horizontal integration facilities (HIF) directly beside each of their three launch pads – two in Florida, one in California. After being transported from the company’s Hawthorne, CA rocket factory, Falcon 9 and Heavy boosters, second stages, payload fairings, and other miscellaneous components are all brought into a HIF, where they are craned off of their transporters (a semi-trailer in most cases) and placed on horizontal stands inside the building.

While in the HIF, all three main components are eventually attached together (integrated). The booster or first stage (S1) has its landing legs and grid fins installed soon after arrival at the launch site, followed by the mating of the first and second stages. Once these two primary components of the rocket are attached, the entire stack – as the mated vehicle is called – is once again lifted up by cranes inside the facility and placed atop what SpaceX calls the strongback (also known as the Transporter/Launcher/Erector, or TEL). A truly massive steel structure, the TEL is tasked with carrying the rocket to the launch pad, typically a short quarter mile trek from the integration facility. Once it reaches the pad, the TEL uses a powerful hydraulic lift system to rotate itself and its rocket payload from horizontal to vertical. It may look underwhelming, but it serves to remember that a complete Falcon 9/Heavy and its TEL are both considerably more than twice as tall as a basketball court is long.

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Once at the pad, the TEL serves as the rocket’s connection to the pad’s many different ground systems. Crucially, it is tasked with loading the rocket with at least four different fuels, fluids, and gases at a broad range of temperatures, as well as holding the rocket down with giant clamps at its base, providing connection points to transmit a flood of data back to SpaceX launch control. SpaceX’s relatively unique TEL technology is to some extent the foundation of the company’s horizontal integration capabilities – such a practice would be impossible without reliable systems and methods that allow the rocket to be easily transported about and connected to pad systems.

Still, after the Amos-6 mishap in September 2016, which saw a customer’s payload entirely destroyed by a launch vehicle anomaly ahead of a static fire test, SpaceX has since changed their procedures, and now conducts those static fire tests with just the first and second stages – the payload is no longer attached until after the test is completed. For such a significant decrease in risk, the tradeoff of an additional day or so of work is minimal to SpaceX and its customers. Once completed, the rocket is brought horizontal and rolled back into the HIF, where the rocket’s payload fairing is finally attached to the vehicle while technicians ensure that the rocket is in good health after a routine test-ignition of its first stage engines.

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Before being connected to the rocket, the payload itself must also go through its own integration process. Recently demonstrated by a flurry of SpaceX images of Falcon Heavy and its Roadster payload, this involves attaching the payload to a payload adapter, tasked with both securing the payload and fairing to the launch vehicle. Thankfully, the fairing is far smaller than the rocket itself, and this means it can be vertically integrated with the payload and adapter. The final act of joining and bolting together the two fairing halves is known as encapsulation – at which point the payload is now snug inside the fairing and ready for launch. Finally, the integrated payload and fairing are lifted up by cranes, rotated horizontally, and connected to the top of the rocket’s second stage, marking the completion of the integration process.

A different way to integrate

Here lies the point at which the Air Force’s $20m contract with SpaceX comes into play. As a result of certain (highly classified) aspects of some of the largest military satellites, the Department of Defense (DoD) and National Reconnaissance Office (NRO) prefer or sometimes outright require that their payloads remain vertical while being attached to a given rocket. The United Launch Alliance (ULA), SpaceX’s only competition for military launches, almost exclusively utilizes vertical integration for all of their launches, signified by the immense buildings (often themselves capable of rolling on tracks) present at their launch pads. SpaceX has no such capability, at present, and this means that they are effectively prevented from competing for certain military launch contracts – contracts that are often the most demanding and thus lucrative.

It’s clear that the Air Force itself is the main impetus pushing SpaceX to develop vertical integration capabilities, a reasonable continuation of the military’s general desire for assured access to orbit in the event of a vehicle failure grounding flights for the indefinite future. For example, if ULA or SpaceX were to suffer a failure and be forced to ground their rockets for months while investigating the incident, the DoD could choose to transfer time-sensitive payload(s) to the unaffected company for the time being. With vertical integration, this rationale could extend to all military satellites, not simply those that support horizontal integration.

Fittingly, the ability to vertically integrate satellites is likely a necessity if SpaceX hopes to derive the greatest possible value from its recently and successfully introduced Falcon Heavy rocket, a highly capable vehicle that the government is likely very interested in. Although the specific Air Force contract blandly labels it a “Design Study,” (FPDS.gov account required) its hefty $21 million award may well be far more money than SpaceX needs to design a solution. In fact, knowing SpaceX’s famous ability to develop and operate technologies with exceptional cost efficiency, it would not be shocking to discover that the intrepid launch company has accepted the design study grant and instead jumped head-first into prototyping, if not the construction of an operational solution. More likely than not, SpaceX would choose to take advantage of the fixed tower (known as the Fixed Service Structure, FSS) currently present at Pad 39A, atop which a crane and work platforms could presumably be attached

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Intriguingly, it is a real possibility that Fairing 2.0 – its first launch scheduled to occur as early as Feb. 21 – could have been upgraded in part to support present and future needs of the Department of Defense, among numerous other benefits. Fairing 2.0’s larger size may have even been precipitated by physical requirements for competing for and dealing with the largest spysats operating by the DoD and NRO, although CEO Elon Musk’s characterization of that change as a “slightly larger diameter” could suggest otherwise. On the other hand, Musk’s offhand mention of the possibility of significantly lengthening the payload fairing is likely aimed directly at government customers in both the civil and military spheres of space utilization. Time will tell, and it certainly will not hurt SpaceX or its customers if Fairing 2.0 is also considerably easier to recover and reuse.

Ultimately, it should come as no surprise that SpaceX would attempt to leverage this contract and the DoD’s interest in ways that might also facilitate the development of the company’s futuristic BFR rocket, intended to eventually take humans to the Moon, Mars, and beyond. As shown by both 2016 and 2017 iterations of the vehicle, it appears that SpaceX intends to use vertical integration to attach the spaceship (BFS) to the booster (BFR). While it’s unlikely that this Air Force contract will result in the creation of a vertical integration system that could immediately be applied to or replicated for BFS testing, the experience SpaceX would gain in the process of building something similar for the Air Force would be invaluable and essentially kill two birds with one stone.

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While now outdated, SpaceX’s 2016 Mars rocket featured a giant crane used for vertical integration. BFR appears to use the same approach. (SpaceX)

Follow along live as I and launch photographers Tom Cross and Pauline Acalin cover these exciting proceedings live and in person.

Teslarati   –   Instagram – Twitter

Tom Cross – Twitter

Pauline Acalin – Twitter

Eric Ralph – Twitter

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Eric Ralph is Teslarati's senior spaceflight reporter and has been covering the industry in some capacity for almost half a decade, largely spurred in 2016 by a trip to Mexico to watch Elon Musk reveal SpaceX's plans for Mars in person. Aside from spreading interest and excitement about spaceflight far and wide, his primary goal is to cover humanity's ongoing efforts to expand beyond Earth to the Moon, Mars, and elsewhere.

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Tesla Full Self-Driving v14.3 rolls out: here’s what’s new

We are in EAP and will be on the road with v14.3 in the coming hours, so we’ll have a lot of things to discuss over the next few days, especially coming from v14.2.2.5, which I called the most “confusing” FSD release of all time.

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April 7, 2026

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Tesla has officially started rolling out Full Self-Driving v14.3 to Early Access Program (EAP) members, and there are a lot of new improvements.

We are in EAP and will be on the road with v14.3 in the coming hours, so we’ll have a lot of things to discuss over the next few days, especially coming from v14.2.2.5, which I called the most “confusing” FSD release of all time.

Tesla brought out a lot of improvements, according to the v14.3 release notes, which list a vast number of fixes, new features, and new capabilities.

Here’s what Tesla’s release notes for the v14.3 release state:

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  • Improved parking location pin prediction, now shown on a map with a P icon.
  •  Increased decisiveness of parking spot selection and maneuvering.
  • Rewrote the Al compiler and runtime from the ground up with MLIR, resulting in 20% faster reaction time and improving model iteration speed.
  • Enhanced response to emergency vehicles, school buses, right-of-way violators, and other rare vehicles.
  • Mitigated unnecessary lane biasing and minor tailgating behaviors.
  • Improved handling of small animals by focusing RL training on harder examples and adding rewards for better proactive safety.
  • Improved traffic light handling at complex intersections with compound lights, curved roads, and yellow light stopping – driven by training on hard RL examples sourced from the Tesla fleet.
  • Upgraded the Reinforcement Learning (RL) stage of training the FSD neural network, resulting in improvements in a wide variety of driving scenarios.
  • Upgraded the neural network vision encoder, improving understanding in rare and low-visibility scenarios, strengthening 3D geometry understanding, and expanding traffic sign understanding.
  • Improved handling for rare and unusual objects extending, hanging, or leaning into the vehicle path by sourcing infrequent events from the fleet.
  • Improved handling of temporary system degradations by maintaining control and automatically recovering without driver intervention, reducing unnecessary disengagements.

Tesla also listed a handful of future improvements as well:

  • Expand reasoning to all behaviors beyond destination handling
  • Add pothole avoidance
  • Improve driver monitoring system sensitivity with better eye gaze tracking, eye wear handling, and higher accuracy in variable lighting situations

CEO Elon Musk has said that v14.3 could be “where the last big piece of the puzzle finally lands.” We have high expectations for this release because, in a lot of ways, v14.2’s final version was extremely disappointing and seemed to be a regression more than anything.

Nevertheless, Full Self-Driving v14.3 is going to be quite an interesting test, considering this is also the first time Musk has stated it will feel like the car will be “sentient.”

Reasoning will be a bigger piece of the puzzle with this release, although there were some elements of it in v14.2.

Tesla AI Head says future FSD feature has already partially shipped

We plan to travel plenty of miles with it over the next few days, so we’ll keep you posted on what our thoughts are.

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Tesla Model Y ownership review after six months: What I love and what I don’t

I pay about $25 more a month than I did for my Bronco Sport for my Tesla. It was a no-brainer to switch. Like any car, it isn’t perfect, but my Tesla has more things right than any other car I’ve owned, and that makes it truly incredible.

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April 7, 2026

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Credit: Joey Klender

It has been just over six months since I took delivery of my Diamond Black Tesla Model Y Premium Long Range (at that time, it was called the Tesla Model Y Long Range All-Wheel-Drive).

In those six months, I have had the opportunity to experience true and pure electric vehicle ownership, what comes with it after driving a gas vehicle for my entire life, and, to be completely frank, there are not many things I would change.

Owning a Tesla was something I never thought I’d do until I owned a house, simply to take advantage of the advantage of home charging. However, I had to take the chance last year with the elimination of the $7,500 electric vehicle tax credit, as well as to avoid the mountainous stack of repair bills that were presenting themselves with my Ford Bronco Sport.

There are a lot of things I love about my Model Y, and there are a handful of things I wish I could change. In this piece, I plan to break down the ownership experience through about six months with my Tesla Model Y, hoping to provide you with enough insight to potentially make a change — or stick with what you have.

Things I Love About My Tesla Model Y

Driving Experience

Tesla really pushes Full Self-Driving and autonomy, but there are times that, as an owner, I feel I need to drive this car manually. Tesla put so much effort into the Model Y’s engineering and driving experience that it feels like a bit of a disservice to have it drive itself around all the time.

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The suspension in this vehicle, as well as its ability to handle sharp corners, its quick acceleration, and its ability to hug the road at spirited speeds, is truly something you need to feel for yourself. I personally have never had a car that was truly geared toward driving this way. Other than a short-lived ownership experience with a Honda Civic a few years back (something I won’t ever do again), all of my vehicles have been SUVs or compact crossovers.

Credit: Joey Klender

Having a car that offers both a fun driving experience and cargo space is what the Model Y truly is all about. It’s a fun car to drive, but it also has a lot of functionality.

It is always a treat when it’s a little warmer out, I can roll the windows down, and take my Model Y to a tight back road in Pennsylvania to have some fun. I have never loved driving in the traditional sense. I don’t hate it, but it’s not necessarily “fun” to me, but that’s probably because I never had a car that was engineered to make the driving experience enjoyable.

This has truly changed my perspective on driving, and the Model Y is probably the second-most-fun car I’ve ever had the pleasure of driving. The first? The Tesla Model S.

Home Charging and Supercharging

Now, Home Charging is relatively new to me, and I covered my process for figuring that out in another article, which is linked here.

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Waking up in the morning and having some additional range is really a great feeling — and with gas prices going through the stratosphere, the money I’m saving on gas is something quite special.

Supercharging is also a fun experience for me. Do I wish it were a faster experience? Sure. But there’s plenty to do in the car: Netflix, Hulu, Tesla Arcade, or head into whatever convenience store is nearby, use the restroom, and grab a bite to eat.

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I have come to enjoy the evenings that I’ll head over to the Supercharger and plug my car in for half an hour before a longer drive the next day (if I didn’t plug in soon enough at home and need some fast-charging).

Tesla also added a new Supercharging “Wrapped” feature at the end of the year, gamifying the entire Supercharging experience. I’m excited to see all the places I’ve charged at the end of 2026.

Sporty, Clean, and Fun Interior

The interior of my Tesla is probably one of the most underrated features of my car, but it’s definitely my favorite. With vehicles I’ve purchased in the past, the big selling point is the inside for me, not the outside. Of course, I want my car to look good to others, but ultimately, I’m paying the payment and I’m spending 100% of the time I’m using the car on the inside of it.

This highlights the need for a comfy, cozy, and capable cabin that has all the features I could want. In Pennsylvania, we have cold winters and hot and humid summers. The Model Y has heated seats and a steering wheel, as well as A/C seats. The HVAC is incredibly capable, customizable, and comfortable for all passengers, allowing them to make adjustments wherever needed.

At night, the black interior coupled with the accent lighting makes for one of the coolest, spaceship-like interiors on the market. Tesla always called it a “Rave Cave,” and it truly feels like it.

Tech: From Full Self-Driving to Other Features

Tech is really the biggest part of owning a Tesla; it is so advanced that it almost feels like it’s not even a car. Full Self-Driving is obviously such a huge advantage, and I’ve talked about it in great detail, both positively and negatively.

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I could write 1,000 words on FSD, but I don’t want to focus on it solely, because there are so many other things that need to be highlighted.

One thing Tesla really has over others is the ability to improve its cars continually. Simple features like a charging adjustment, new modes, or activating features that weren’t quite ready previously are all things Tesla has added through Over-the-Air updates.

I don’t know if I could pick just one as a favorite, but in the six months I’ve had my car, the most useful thing I’ve come across outside of FSD is Summon. While it is hit or miss a lot of the time, there are little features, like moving the car forward or back from the Tesla App, that are incredibly useful. Adjusting a park job, making snow shoveling around the car easier, or even moving the car slightly when I’m taking photos or video is incredibly seamless with this functionality.

Cargo and Interior Space

One of my big concerns when going from a Bronco Sport to a Model Y was cargo space, only to find out the Model Y has more space than the Bronco Sport. I always have something in the trunk, whether it is luggage, my golf bag, shoes, or groceries. I’ve never felt like I’ve needed more space in this car, although I’m sure that day will come when I get the boys together for a golf trip and I am driving.

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I’ve packed luggage for my Fiancèe and a few of her friends on a trip to Disney with no issues. Four girls going to Disney for five days is a challenge that will frighten even the most capable vehicles. I had no issues.

But what is also great about the Model Y is that it has the room to do other things, like fit an entire mattress for camping. SNUUZU makes an amazing Tesla mattress that I have thrown in the car to watch sunsets. This Summer, I’ll do some camping with it.

It’s one of the many things about this car that I really love.

Things About My Tesla Model Y I Do Not Love

Winter Range

There’s no getting around the fact that owning this car without a faster charging option at home in the winter is truly frustrating. I was charging much more frequently in January and February than in any other month.

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I took a 40-mile round-trip drive to grab some hot wings with friends in January. It took about 105 miles of range.

The cold weather was truly a frustrating time to own an EV, and my problems would have been solved with a Level 2 charger at home. Even still, the drives that were a few hours long were going to be fit with 10-15 minute stops to grab some range at a Supercharger.

Navigation

I really think that Tesla could have the best navigation out there. They always talk about licensing FSD, but if they were to license their Navigation software, I think it could overtake Apple Maps, Waze, and others. With a weather radar, live traffic updates, satellite imagery, and more, the Navigation system is truly the best around.

However, the Navigation itself, meaning the routing, is absolutely abysmal. It doesn’t learn from mistakes, it doesn’t learn more ideal routing, and it doesn’t seem to improve at any point. It still tries to leave my neighborhood by turning left out of a right-turn-only exit. It routinely takes some of the most head-scratching routes to local destinations.

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Consistently using the FSD disengage feature to report the problems to Tesla’s AI Team doesn’t seem to yield much of a result. It would be great if there were a “Learn” mode so that it could be less on Tesla to refine things, and the car would just learn automatically.

Cup Holders

This is a really trivial and nitpicky point of criticism, but boy, do these cupholders need to be larger. Many of my reusable water bottles do not fit in them, so I had to grab a $25 cup holder “adapter” from Amazon. It obstructs the center console from opening comfortably, but it is what it is. It fits standard cups, soft drink containers from fast food restaurants, and bottles of water, at least for the most part.

It would be nice if Tesla could think about something for the next Model Y refresh here, although I may be the only one to really complain about them.

Final Thoughts

I pay about $25 more a month than I did for my Bronco Sport for my Tesla. It was a no-brainer to switch. Like any car, it isn’t perfect, but my Tesla has more things right than any other car I’ve owned, and that makes it truly incredible.

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Sometimes I am still baffled that this is my car. It feels crazy to drive something that is so far ahead of any other car I’ve driven. Three of my friends own Teslas now, all of us bought them at the same time last year, and all four of us don’t know if we’d ever consider going back.

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Elon Musk’s Terafab project locks up massive new partner

Terafab, first revealed by Musk in March, is a massive joint-venture semiconductor complex planned for the North Campus of Giga Texas in Austin.

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6 hours ago

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April 7, 2026

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Credit: SpaceX

Elon Musk’s Terafab project just locked up a massive new partner, just weeks after the new project was announced by Tesla, SpaceX, and xAI, the three companies that will be direct benefactors from it.

In a landmark announcement on April 7, Intel joined Elon Musk’s Terafab project as a key partner alongside Tesla, SpaceX, and xAI. The collaboration focuses on refactoring silicon fabrication technology to deliver ultra-high-performance chips at unprecedented scale.

Intel CEO Lip-Bu Tan hosted Musk at Intel facilities the prior weekend, underscoring the partnership’s momentum with a public handshake.

Terafab, first revealed by Musk in March, is a massive joint-venture semiconductor complex planned for the North Campus of Giga Texas in Austin. Valued at $20–25 billion, it aims to consolidate the entire chip-making pipeline, design, fabrication, memory production, and advanced packaging in a single location. It should eliminate a majority of Tesla’s dependence on third-party chip fab companies.

The facility will manufacture two primary chip types: energy-efficient edge-inference processors optimized for Tesla’s Full Self-Driving (FSD) systems, Cybercab and Robotaxi, and Optimus humanoid robots, and high-power, radiation-hardened variants for SpaceX satellites and xAI’s orbital data centers.

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Elon Musk launches TERAFAB: The $25B Tesla-SpaceXAI chip factory that will rewire the AI industry

The project’s audacious goal is to produce 1 terawatt (TW) of annual compute capacity, roughly 50 times current global AI chip output.

Production is expected to begin modestly and scale rapidly, addressing Musk’s warning that chip supply could soon become the biggest constraint on Tesla, SpaceX, and xAI growth. By vertically integrating manufacturing tailored to their exact needs, Terafab eliminates supply-chain bottlenecks and accelerates iteration for AI training, inference at the edge, and space-based computing.

Intel’s participation is strategically vital. The company will contribute expertise in advanced process technology, high-volume fabrication, and packaging to help Terafab achieve its aggressive targets. For Intel, the deal strengthens its foundry business and positions it as a critical U.S. player in the AI hardware race.

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For Musk’s ecosystem, it secures domestic, purpose-built silicon at a time when global capacity meets only a fraction of projected demand for hundreds of millions of robots and orbital AI infrastructure.

This is the latest chapter in Intel-Tesla ties. In November 2025, Musk publicly stated at Tesla’s shareholder meeting that partnering with Intel on AI5 chips was “worth having discussions,” amid concerns about TSMC and Samsung capacity.

Exploratory talks followed, with Intel eyeing custom-AI opportunities. The Terafab integration transforms those conversations into concrete collaboration.

The Intel-Terafab alliance carries broader implications. It bolsters U.S. semiconductor sovereignty, drives innovation in cost- and power-efficient AI silicon, and supports Musk’s vision of exponential progress in autonomy, robotics, and space.

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As AI compute demand surges, this partnership could reshape the industry, delivering the silicon backbone for a new era of intelligent machines on Earth and beyond.

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