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SpaceX’s next-gen Falcon Heavy closer to reality as side booster leaves factory
A duo of rocket spottings on November 9th and 10th confirm that SpaceX’s next Falcon Heavy rocket – an amalgamation of three Falcon 9 boosters, an upper stage, and extensive modifications – is already in the late stages of manufacturing and is nearing the beginning of integrated structural and static fire testing.
As of now, this Falcon Heavy side booster could end up supporting either or both of two near-term launch contracts in place for the rocket, communications satellite Arabsat 6A or the US Air Force’s second Space Test Program (STP-2) launch
SpaceX's second Falcon Heavy is slowly but surely coming together 😀 https://t.co/AYJsQ8Mld5
— Eric Ralph (@13ericralph31) November 13, 2018
The question of the hour – at least for Falcon Heavy – is which of those two available payloads will be atop the rocket on its first truly commercial launch. While suboptimal, a few general characteristics of each payload, SpaceX’s history of commercial launches, and Falcon Heavy itself can offer a hint or two.
Triple the rocket, triple the trouble
Thanks in large part to the fact that the first integrated Falcon Heavy was composed of two relatively old Falcon 9 booster variants and a center core that was quite literally a one-off rocket, the process of reenginering and building another Falcon Heavy rocket off of the family’s newest Block 5 variant has likely been far harder than simply building another Falcon Heavy. Although all three original Falcon Heavy boosters (B1023, B1025, and B1033) were in the same league as Block 5, their Block 2 and Block 3 hardware was designed for approximately 10% less thrust and are almost entirely different vehicles from the perspective of structures and avionics.
Perhaps even more importantly, it’s unknown whether Falcon Heavy Block 1 (for lack of a better descriptor) was designed with serious reusability in mind, at least in the same sense as Falcon 9 Block 5 was. For instance, a major portion of the rocket’s extreme complexity and difficulties lies in the basic need to transmit three times as much thrust through the center core. To do that and do it without rocket-powered separation mechanisms, SpaceX had to develop structural attachments and connections capable of surviving unbelievable mechanical and thermal stresses for minutes on end.
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- The first Falcon Heavy was a Frankenstein’s monster of sorts. (SpaceX)
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- Falcon Heavy is seen here lifting off during its spectacular launch debut. (SpaceX)
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- A Falcon Heavy side booster was spotted eastbound in Arizona on November 10th. (Reddit – beast-sam)
Clearly, this was an unfathomably difficult problem to solve in such a manner that Falcon Heavy would work at all the first time. Factor in the strategic need for those same components to survive repeated cycles of those stresses with minimal refurbishment in between and the problem at hand likely becomes a magnitude more difficult, at least. In large part, this helps to explain why there will end up being a minimum of 11-12 months between Falcon Heavy’s first and second launches.
Arabsat or STP?
Over the course of SpaceX’s last 2-3 years of commercial launch activity, the company and its customers have demonstrated time and time again a reliable pattern: commercial customers (in the sense of private entities) are far more willing to take risks with new technologies than SpaceX’s government customers. NASA’s Commercial Resupply Services is the exception for the latter group but also has no Falcon Heavy launch contracts. For Falcon Heavy, there are thus main three options at hand.
- Arabsat 6A launches first with 1-2 flight-proven boosters; the Air Force’s STP-2 mission flies on an all-new Falcon Heavy 4-6 months later.
- SpaceX builds entirely new Falcon Heavy rockets for both customers, requiring four new side boosters and two new center cores.
- STP-2 launches first on an all-new Falcon Heavy; Arabsat 6A launches second on the first flight-proven Falcon Heavy after 6+ months of additional delays.
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- The USAF’s STP-2, a combination of a few dozen different satellites. (USAF)
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- The communications satellite Arabsat-6A. (Lockheed Martin)
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- LZ-1 and LZ-2, circa February 2018. (SpaceX)
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- A closeup of one of Falcon Heavy’s side boosters after landing. (SpaceX)
Arabsat is far more likely to accept – for a significant discount – a ride aboard the first flight-proven Falcon Heavy, especially if it means preventing more major launch delays. If the Falcon Heavy side booster spotted eastbound last week is a refurbished Block 5 booster rather than a new rocket, than option 1 is the easy choice for most probable outcome. The real pack leader for Falcon Heavy Flight 2, however, will be the completion of a new Block 5 center core and its shipment to Texas for structural and static fire testing.
Time will tell. For now, a completed Falcon Heavy side booster is the best sign yet that SpaceX may manage the rocket’s second launch in the first quarter of 2019, whichever launch that may be.
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
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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.
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.”
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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.
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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.
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
