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Elon Musk says a SpaceX Falcon 9 rocket is about to be "destroyed in Dragon fire"
SpaceX CEO Elon Musk has officially confirmed that the company’s next Falcon 9 launch will destroy the flight-proven booster and upper stage “in Dragon fire”, a cryptic reference to the ultimate purpose of the sacrifice.
Known as SpaceX’s In-Flight Abort (IFA) test, the mission is designed not to place any particular payload in orbit but to demonstrate that Crew Dragon – the company’s first human-rated spacecraft – can ensure astronaut safety even if faced with a worst-case scenario during launch. IFA will mark Crew Dragon’s second dedicated abort test and second launch on a SpaceX Falcon 9 rocket, although the mission’s brand-new spacecraft will have to suffice with a suborbital jaunt before hopefully splashing down intact in the Atlantic Ocean.
If everything goes as planned, SpaceX has every intention of reusing the IFA Crew Dragon capsule on a future mission, although it’s unclear what that mission might look like. It’s unlikely that a reused SpaceX spacecraft will fly NASA astronauts anytime soon but it’s possible that the company will refurbish the vehicle for an entirely private astronaut launch or transform it into the first uncrewed launch of a next-generation Cargo Dragon (Dragon 2). Regardless, given the challenges posed by the In-Flight Abort, Crew Dragon’s survival is far from guaranteed.
Given that such an abort scenario is by definition a possibility, it’s likely the case that SpaceX’s engineers are almost certain that Crew Dragon should be able to survive such an ordeal, but the spacecraft will likely be pushed to its limits and it’s often much harder to ensure that everything works as intended at those limits.
In-Flight Abort by the numbers
Formerly scheduled to fly since-destroyed Crew Dragon capsule C201, SpaceX was forced to shuffle its spacecraft scheduling, reassigning Crew Dragon capsule C205 – originally expected to launch SpaceX’s first NASA astronaut mission – to support the In-Flight Abort. Featuring upgrades designed to prevent the failure mode that led to C201’s violent explosion, C205 will now have to survive a series of extremely challenging environments.
The IFA test is designed to prove that Crew Dragon can escape a failing Falcon 9 rocket during the most mechanically stressful point of launch. Occurring around 80-100 seconds after liftoff and known as Max Q, it’s the point where Falcon 9’s velocity and altitude combine to create the most friction and pressure the rocket’s windward parts will experience on their climb to orbit. For Crew Dragon, this means its SuperDraco abort engines will have to work fight upwards against air that is functionally (but not literally) much thicker than it is at other points during flight – a battle that will simultaneously put even more pressure (mechanical stress) on the spacecraft’s surfaces.
Purely from a numerical perspective, the pressure at Max Q is typically around 30-35 kPa (4.5-5 psi), which doesn’t sound like much but can easily become a force to be reckoned with when the surface area of the rocket or spacecraft being impacted is as large as Crew Dragon (let alone Starship). For reference, Crew Dragon capsules likely have a conical surface area on the order of 30,000 square inches (~19 m²), meaning that the spacecraft is subjected to a total mechanical load of 50-60 metric tons (~130,000 lbf) at Max Q.
Traveling as fast as Mach 2.5 (860 m/s) at an altitude of 28 kilometers (17 mi) at the point where Crew Dragon will ignite its abort thrusters and attempt to escape, that very act of escape will likely magnify the mechanical stresses on the capsule even further. During Crew Dragon’s 2015 Pad Abort, for example, the spacecraft went from a standstill to 155 m/s (345 mph) in 7 seconds – an average acceleration of about 2.3 Gs. Crew Dragon C205 could thus find itself traveling almost Mach 3 (more than a kilometer per second) just seconds after separating and may ultimately reach a peak altitude of almost 75 km (45 mi).
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This is all to simply say that Crew Dragon is going to be subjected to an array of varying extremes in a very short period of time, during and after which it must still successfully control its orientation, avoid tumbling, detach its trunk section, and deploy a series of parachutes to achieve a fully-successful test. Additionally, the In-Flight Abort test will see Crew Dragon launch on an almost orbit-worthy Falcon 9 upper stage (lacking only a functional Merlin Vacuum engine) and thrice-flown booster B1046.
According to CEO Elon Musk, it simply is not going to be possible to prevent the historic booster – the first Falcon 9 Block 5 rocket ever launched – from being destroyed shortly after Crew Dragon attempts its escape. Once Dragon departs Falcon 9, the upper stage will likely be torn to shreds by the supersonic airstream suddenly buffeting it, ultimately exposing Falcon 9 B1046’s unchanged interstage – effectively a giant, open cylinder closed at its base.
Likely still travel supersonic, the results of the airstream entering Falcon 9’s interstage and finding no exit will likely be akin to a glass cup smashing mouth-first into a brick wall with a bowling ball taped to its bottom. Thankfully, Falcon 9 B1046 has already successfully supported three orbital-class launches since it debuted in May 2018, completing its third flight just seven months later. The booster will be missed and the opportunity cost (at least several more orbital-class launches) is definitely non-zero, but its sacrifice sill be for a good reason.
As Musk notes, if the In-Flight Abort goes as planned, it could pave the way for Crew Dragon’s first NASA astronaut launch – known as Demo-2 – as few as 6-8 weeks later. For now, Crew Dragon’s IFA test is scheduled to launch no earlier than (NET) January 18th, likely around 8 am EST (13:00 UTC).
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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.
Elon Musk launches TERAFAB: The $25B Tesla-SpaceXAI chip factory that will rewire the AI industry
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.”
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
