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SpaceX CEO Elon Musk talks Starship explosion: “We were too dumb”
Two days after a last-second failure caused Starship SN9 to smash into the ground and explode, SpaceX CEO Elon Musk has returned to Twitter with some harsh preliminary reactions.
Right off the bat, in response to a question about why Starships SN8 and SN9 both attempted their unsuccessful landings with only two of three available Raptor engines, Musk frankly stated that “we were too dumb.” At face value, it’s a decent question, given that there are no obvious showstoppers to explain why Starships couldn’t make the most of the redundancy their three Raptor engines can offer.
After completing an otherwise flawless 6.5 minutes launch, ascent, and belly-flop descent, Starship SN9 began a critical ~120-degree flip maneuver, sequentially igniting two Raptor engines and using that thrust to flip from a belly-down attitude to a tail-first landing configuration. Unfortunately, though the first Raptor did fire up and put in a good effort, the second engine failed to ignite, leaving the building-sized rocket to impact the ground traveling far too quickly.
Ironically, more than three years ago, Musk himself revealed in a Reddit Ask Me Anything thread that he and his engineers had decided to modify Starship’s (then known as BFS) design by adding a third Raptor to its central cluster of two engines.
“Btw, we modified the [Starship] design since IAC [2017] to add a third medium-area-ratio Raptor engine partly for that reason (lose only 1/3 thrust in engine out) and allow landings with higher payload mass for the Earth to Earth transport function.”
Elon Musk – Reddit AMA – October 2017
Primarily meant to enable more efficient landings in Earth’s atmosphere, adding a third engine to that cluster would logically increase the chances of a successful (or at least survivable) landing in the event that one engine fails. Greater thrust and an improved thrust-to-weight ratio both during launch and landing would fundamentally improve the efficiency of Starship, likely making up for most or all of the added weight.
In retrospect, it’s not entirely surprising to learn that a three-engine landing burn is probably the most logical option if three landing-class engines have been included in the design. In SpaceX and Musk’s defense, however, there are also several good reasons to use as few Raptor engines as possible.
It was foolish of us not to start 3 engines & immediately shut down 1, as 2 are needed to land— Elon Musk (@elonmusk) February 4, 2021
Throttling high-performance rocket engines is exceptionally difficult and Raptor is not yet a fully mature engine, meaning that it’s throttle capabilities are likely less than optimal. That’s relevant because the higher a rocket’s thrust-to-weight ratio during landing, the more aggressive its landings have to be. SpaceX is apparently extremely conservative with Starship in this regard, prioritizing slow, gentle landings by only using two of three available engines.
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Ironically, it’s possible that that attempt at risk reduction resulted in harder landings for both Starship SN8 and SN9, as three-engine landing burns could have potentially slowed them down significantly more before impact.
At the same time, though it may have mitigated the severity of both landing failures, three-engine landing burns would not have resolved the fundamental issues that caused them. In SN8’s case, low fuel header tank pressure doomed the Starship, while SN9 is more ambiguous. Aside from the clear Raptor ignition failure, which a three-engine burn could have resolved by downselecting to two healthier engines, the one Raptor that did ignite appeared to suffer some kind of uncontained failure seconds before landing.
Impressively, despite that apparent combustion chamber or preburner failure, the engine’s landing burn seemed to continued uninterrupted until the moment of impact. As such, it’s hard to say if that lone Raptor was still producing substantial thrust or if it was in the throes of a catastrophic failure. If it could have held on for another 5-10 seconds and the third Raptor (the engine that didn’t reignite) was able to restart and perform without issue, a three-engine landing burn could have easily made SN9’s demise less violent or even have enabled a soft landing.
While a three-engine burn all the way to touchdown appears to be extremely risky or impossible for present-day Starships, Musk implied that there was nothing preventing SpaceX from reigniting all three engines during the initial flip and landing burn and using that time to determine the health of all three engines. If all three were healthy, Starship would shut down one for a soft landing. If one engine failed to restart or lost thrust shortly after ignition, the other two would already be active and able to take over.
Musk says that Starship SN10, already at the launch pad and likely days away from its first tests, will attempt to adopt that approach on an upcoming test flight expected as few as 2-3 weeks from now.
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
