SpaceX
SpaceX to static fire Falcon 9 with a spacecraft on board for the first time in two years
SpaceX has rolled Falcon 9 and Crew Dragon out to Pad 39A for the second time ever in preparation for a full wet dress rehearsal (WDR) and static fire – no earlier than Jan. 23 – of booster B1051’s nine Merlin 1D engines, preparing for an orbital launch attempt that slipped from NET Feb. 9 to Feb. 16 earlier this week.
While this milestone is important for myriad other reasons, it happens to be exceptionally unique thanks to one particularly surprising feature: Falcon 9 rolled out for its static fire with Crew Dragon (the rocket’s payload) still attached. This will be the first time in more than 28 months – since Amos-6, the last catastrophic Falcon 9 failure – that SpaceX has performed its routine on-pad static fire with a valuable payload attached to the rocket.
The Falcon 9 and Crew Dragon are now in position at launch pad 39A in readiness for a crucial test firing of its nine first-stage engines as soon as tomorrow: https://t.co/kYCr6Nzd0I pic.twitter.com/9VDXJL7ZLX
— Spaceflight Now (@SpaceflightNow) January 22, 2019
On September 1st, 2016, a SpaceX Falcon 9 experienced the rocket family’s second catastrophic failure ever when supercool liquid oxygen froze around a COPV’s carbon fiber wrappings, expanding just enough to breach the ultra-high-pressure vessel. Falcon 9 and its ~$200M Amos-6 satellite payload were completely destroyed, while Launch Complex 40 (LC-40) suffered tens of millions of dollars of damage that would effectively require it to be completely rebuilt over the course of more than a year.
After Amos-6, SpaceX immediately halted the practice of including customer payloads on Falcon 9 during static fires, used to save 24-48 hours of time between static fire and launch. SpaceX nevertheless retained the option if customers were to explicitly request it, otherwise wisely concluding (likely with more than a little encouragement from insurance companies) that expediting schedules by a few dozen hours was not worth the entirely unnecessary risk to satellite payloads that often cost hundreds of millions of dollars and take years to build.
https://twitter.com/spiel2001/status/1087828282937102338
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Given that SpaceX has stuck to that practice for all 38 Falcon 9 launches it has performed between Amos-6 and the present day, it seems all but guaranteed that the first orbit-ready Crew Dragon’s presence on Falcon 9 during its static fire has been done only at the specific request of the launch customer – in this case, NASA. It’s probably not hyperbolic to argue that Demo-1’s (DM-1) Crew Dragon is the most valuable, important, expensive, and irreplaceable spacecraft SpaceX has ever attempted to launch, having likely spent millions of work hours building, changing, refining, and testing it to meet NASA’s exacting and sometimes absurd requirements.
If Falcon 9 B1051 were to fail with Crew Dragon atop it during its Pad 39A static fire, it might be possible for the DM-2’s Crew Dragon to be completed and modified for an uncrewed test flight with just six months of delay, assuming Falcon 9’s mode of failure could be investigated and repaired to NASA’s satisfaction. However, the destruction of the DM-1 capsule and trunk could almost indefinitely delay SpaceX’s first crewed launch, dependent upon an inflight-abort test that is supposed to use the refurbished DM-1 capsule, while the Crew Dragon currently supposed to launch after DM-2 is unlikely to be ready before August or September 2019.
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- The first complete Crew Dragon is likely just days away from rolling out to Pad 39A atop Falcon 9. (SpaceX)
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- An impressive view of Crew Dragon (DM-1), Falcon 9 B1051, and its upper stage. (SpaceX)
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- DM-1 and Falcon 9 were greeted by an extraordinary – albeit mildly bittersweet – dawn during their first-ever trip out to Pad 39A. (SpaceX)
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- Falcon 9 and Crew Dragon vertical at Pad 39A. (SpaceX)
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- Crew Dragon and its crew-rated Falcon 9 went vertical at a launch pad (Pad 39A) for the first time ever on January 4th. (SpaceX)
Ultimately, NASA likely requested that Crew Dragon remain atop Falcon 9 for this static fire out of some desire for a full-fidelity test environment and complement of data. There is perhaps a very limited chance that Crew Dragon will be fully fueled with hydrazine (MMH/NTO) and have its launch escape system (LES) active and ready to go in the event of a rocket failure.
Why they deemed the immense potential risk to be worthwhile is far less clear. Whether it is being done out of complacency or a desire for expediency or ultra-realistic test data, the risk is the same. In theory, Falcon 9 has been tested extensively and should operate perfectly, just as expected. So was Amos-6’s Falcon 9.
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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.
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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.
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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.
Elon Musk
Another Tesla SpaceX merger prediction by ARK Invest has Elon Musk talking
Elon Musk again denies a Tesla China split as new SpaceX merger speculation resurfaces quickly.
Elon Musk restated that Tesla has no plans to separate its China business from the rest of the company, responding to a new round of merger speculation from ARK Invest.
On the firm’s “Brainstorm” podcast, Cathie Wood’s team, including chief futurist Brett Winton and research director Nick Grous, argued a Tesla and SpaceX combination remains likely, with an announcement possible before the end of the year even if the deal itself would not close that quickly. Winton called Tesla’s Shanghai operations a “small ish wrinkle” for a merger rather than a real obstacle, since SpaceX’s national security work with the U.S. government sits uneasily next to Tesla’s manufacturing base in China.
Musk pushed back on the framing directly. “China is awesome. I strongly encourage people to visit,” he wrote on X. He also repeated language he first used in late July, when the Wall Street Journal reported that Tesla executives had been told to prepare for a possible spinoff, sale, or closure of the China business ahead of a SpaceX tie up. Musk called that report “absurdly fake news” at the time, adding that a separation had “never even come up in a discussion ever,” a line he echoed again this week.
The repeated denial has not settled the underlying question, because Shanghai’s role in Tesla’s business is exactly what makes a merger complicated. Gigafactory Shanghai still ships more than half of Tesla’s global deliveries and functions as the company’s main export hub for Europe and Asia. Teslarati previously reported on Musk’s initial denial, and the merger conversation itself has been building since SpaceX’s IPO gave it public shares to use as acquisition currency.
Wedbush’s Dan Ives has pegged the odds of a Tesla SpaceX merger at 80 to 90 percent by early 2027, and ARK’s prediction of a year end announcement adds another data point to that timeline, even as Musk keeps rejecting the specific mechanics reporters have described. Neither position rules out the other. Musk can deny a China spinoff was ever discussed while analysts still expect some form of combination to move forward, since ARK and Ives are both describing convergence at the corporate level, not necessarily the internal restructuring the Journal described in July.
For now, Tesla’s China business remains intact, and Musk’s comments this week make clear he has no interest in publicly walking that position back, no matter how often the merger question resurfaces.
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SpaceX stock did the opposite of what most of Wall Street expected this week, when the day designed to be its most dangerous turned into a rally, and the rally kept going.
Thursday marked the first major lockup expiration since SpaceX’s June IPO, making roughly 911.5 million insider held shares eligible to trade for the first time, more than doubling the company’s public float. Analysts and short sellers had spent weeks bracing for a flood of selling, especially after the stock fell 13 percent following its first earnings report as a public company on Tuesday. Instead, shares rose 6.1 percent Thursday to close at $114.92, and by Friday they were trading near $129, up more than another 12 percent on the day.
SpaceX shorts get warned by Musk ally, echoing Tesla’s early struggles
The setup made the outcome notable. Short interest had climbed to roughly 34 percent of the float heading into earnings, among the highest of any large cap stock, with about 95 percent of available shares to borrow already on loan. CEO Elon Musk warned short sellers twice in the weeks before the lockup, writing on X that “the survival probability of firms who maintain a significant short position in SpaceX over time is very low,” then following up on the morning of earnings with “I try to warn them, but they just double down.”
When the newly unlocked shares hit the market and the selloff never showed up, some of that short position appears to have started unwinding. TipRanks reported that options activity shifted toward bullish strategies like put selling and risk reversals following the rally, with roughly $600 million in options premium trading Thursday alone. Retail buyers also stepped in during the earnings dip, according to Vanda Research.
The fundamentals behind the stock have not changed much in a week. SpaceX’s revenue nearly doubled year over year to $7.8 billion, with Starlink subscribers doubling to 12 million and the company’s AI segment growing 247 percent. What spooked investors on Tuesday was the spending side. Capital expenditures jumped to more than $18 billion for the quarter, up from $2.8 billion a year earlier, with AI investment alone rising from $749 million to $15.8 billion. Wall Street remains split on whether that spending is building infrastructure SpaceX needs or outrunning what the business can currently support, a debate Teslarati has tracked since shares first came under pressure.
None of that resolves the bigger question hanging over the stock. Thursday’s release was only the first of nine staggered lockup tranches, with roughly $800 billion worth of additional shares scheduled to become eligible through October, and Musk’s own stake stays locked until next June. If this week is any indication, the market is treating that supply as something it can absorb rather than something to fear, at least for now.
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Tesla has one big financial question to answer for investors: Morgan Stanley
SpaceX AI investment gamble will make it a big winner, firm says
