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SpaceX says Crew Dragon parachute upgrade nailed more than a dozen tests in a row
According to SpaceX, Crew Dragon’s upgraded ‘Mk3’ parachutes have successfully completed more than a dozen tests in a row, a feat accomplished by SpaceX engineers and technicians in a single week.
Although SpaceX will likely continue to test the upgraded parachutes over the next several weeks and months, Mk3’s success up to now – including a demonstration of an emergency landing scenario – likely means that the company is well on track for NASA to certify Crew Dragon for its first astronaut launch.
Known as Demo-2, SpaceX’s first crewed demonstration mission is tentatively scheduled to launch no earlier than the first quarter of 2020 and is almost entirely dependent upon NASA (and SpaceX, to a lesser extent) completing review and qualification paperwork. On October 8th, SpaceX CEO Elon Musk indicated that SpaceX itself – including all Crew Dragon and Falcon 9 hardware – would likely be ready to launch before the end of December 2019.
During an October 30th briefing from Commercial Crew Program manager Kathy Lueders, NASA essentially confirmed Musk’s estimate for Crew Dragon hardware readiness, estimating that the Crew Dragon Demo-2 spacecraft will be ready for flight around the end of December. The mission’s Falcon 9 booster has also completed testing in Texas, while SpaceX plans to ship the Falcon 9 upper stage to Texas for acceptance testing in November.
In recent months, NASA has indicated that the parachute systems of both Boeing’s Starliner and SpaceX’s Crew Dragon were a prominent concern after chute failures occurred on several occasions. In response, SpaceX redesigned Crew Dragon’s parachutes – supplied by Airborne Systems – to account for the failure modes experience, while also advancing the state of the art of computer modeling of parachute deployment and behavior.
In response to past failures, SpaceX chose to further upgrade and strengthen Crew Dragon’s parachutes, moving to a ‘Mk3’ variant with stronger Zylon risers (strips connecting Dragon to its parachute rigging), among other tweaks. Notably, in an October 2019 press conference with Musk, NASA administrator Jim Bridenstine noted that SpaceX had plans to field and test those Mk3 parachutes at least 10 times before the end of 2019.
“We could see as many as 10 drop tests between now and the end of the year and depending on how the next 10 drop tests go, we will know how many more drops tests we are going to add.”
Jim Bridenstine, October 10th, 2019
In fact, during the latest stage of testing, SpaceX says it successfully completed thirteen consecutive tests of Crew Dragon’s new Mk3 parachutes, all of which were completed in less than two weeks. This essentially blows Bridenstine’s expectations out of the water, as SpaceX has surpassed his predicted 10 tests and done so barely three weeks into the tentative 12-week window he set. SpaceX now has plenty of time to either continue testing Crew Dragon’s parachutes or refocus its efforts on other equally important qualification challenges.
Prior to those thirteen consecutive successes, SpaceX suffered two failures during single-parachute Mk3 testing. The first two development tests of the Mk 3 design used loads much higher than the parachutes would ever see in operation in an effort to better understand overall design margins and system performance. After a period of rapid iteration with parachute provider Airborne Systems, the faults responsible for those two stress-test failures were resolved and subsequent drop tests confirmed that Mk3’s suspension lines – the numerous lines connecting the parachute to Crew Dragon – are far stronger than those on Mk2.
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Perhaps most crucially, the most recent test – shown in the video shared by SpaceX on November 3rd – was the first multi-chute Mk3 demonstration and simultaneously proved that Crew Dragon will be able to safely land its astronaut passengers even if one of the spacecraft’s four parachutes fail to deploy. Despite those consecutive successes, SpaceX and Airborne will continue testing Mk3 parachutes as rapidly as possible and aim to provide NASA the data it needs to qualify Crew Dragon’s parachutes for crewed flight before the end of 2019.
Either way, the next several months are set to be a frenetic period for NASA’s Commercial Crew Program. As early as November 4th, Boeing aims to attempt a pad abort test of its Starliner spacecraft, while SpaceX is set to static fire a Crew Dragon capsule on November 6th. If both tests are successful, SpaceX aims to launch Crew Dragon’s In-Flight Abort (IFA) test in early-December, while Boeing hopes to launch Starliner on its first uncrewed Orbital Flight Test (OFT) no earlier than December 17th.
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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.
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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.
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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.
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
