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SpaceX’s Raptor engine nears flight-readiness for BFR spaceship hop tests
In a presentation that revealed plans for a private mission to the Moon in as early as 2023, SpaceX CEO Elon Musk dedicated a couple minutes to BFR’s booster and spaceship rocket engine of choice, Raptor. Musk had nothing but praise for SpaceX’s propulsion engineers and technicians, stating that he was “really excited” about the propulsion system’s advanced design.
SpaceX has completed over 1,200 seconds of firing across 42 main Raptor engine tests. pic.twitter.com/EhxbPjd8Cj
— SpaceX (@SpaceX) September 29, 2017
Judging from a total of 1200 seconds of hot-fires completed just under a year ago, it’s safe to assume that Raptor has soared beyond that measure. Most recently, photos captured earlier this summer showed that a new prototype was installed on SpaceX’s horizontal Raptor test stand in McGregor, Texas, looking nearly identical to the deep black Raptor nozzle shown in Monday’s presentation. Previous Raptor prototypes seen during testing or at the test stand appeared to have a nozzle closer to SpaceX’s silver Merlin 1Ds, whereas this newest iteration’s nozzle doesn’t seem to reflect the powerful spotlights surrounding it.
Perhaps not a coincidence, SpaceX’s propulsion engineering lead Tom Mueller stated in May 2018 that flight-ready Raptors were already “in work”, with the implication being that the finalized Raptor design had been completed and that manufacturing work was beginning in earnest. Barring an unexpected shift in testing strategies, SpaceX will optimize and verify Raptor’s flight design over the course of several hundred seconds of static fire tests, eventually leading into the same practices used for Falcon 9.
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- A September 2018 render of Starship (then BFS) shows one of the vehicle’s two hinged wings/fins/legs. (SpaceX)
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- In 2018, Musk decided to sidestep vacuum engines entirely, moving to 7 SL Raptors. (SpaceX)
“This is a stupidly hard problem and SpaceX engineering has done a great job with this design.” In a May 2018 tweet, Musk added that “this engine is something special.” – Elon Musk, 09/17/18
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Prior to being installed on any BFR prototypes, all Raptors will thus go through acceptance testing in Texas, potentially followed by a full-up static fire of the first completed BFR spaceships. Falcon 9 boosters – capable of roughly 7600 kN (1.7 million lbf) of thrust – are routinely tested in McGregor, while a full BFR spaceship with 2017-grade Raptors (1700 kN at sea level) would produce 12,000 kN (2.7 million lbf) of thrust with all Raptors firing. However, due to the sheer difficulty of transporting something 9 meters in diameter by road, it’s more likely that SpaceX will need to build up a dedicated static fire and hop test facility near the coast of Texas, at a spot called Boca Chica.
An immense liquid oxygen (LOX) tank just arrived at @SpaceX's prospective Boca Chica, TX facility, likely to be dedicated to BFR & BFS testing. @NASASpaceflight forum user "Nomadd" caught some of the first detailed photos, as well as the tank's arrival at SpaceX land on July 11. pic.twitter.com/hr7SeA6BGw
— Eric Ralph (@13ericralph31) July 12, 2018
Getting to hop tests
As it turns out, massive propellant storage tanks (vacuum insulated) have already begun arriving at SpaceX’s Boca Chica facilities, currently dedicated to a duo of tracking and communications radars to be used for Crew Dragon communications. Over the course of the next 12 or so months, SpaceX is thus likely to expand and develop its Boca Chica facilities, culminating – if all goes well – sometime late next year with the first shipment of a prototype BFR spaceship from Port of Los Angeles, through the Panama Canal, to Port of Brownsville, Texas.
“I’m really excited about this engine design, I think the SpaceX propulsion team has done an amazing job – the SpaceX structures and aero team has done a phenomenal job in the design of this.”
“Even others in the aerospace industry don’t know what question to ask – once we could frame the question [with precision], the answers [for Raptor and BFR R&D] flowed.” – Elon Musk, 09/17/18
SpaceX has already completed the first composite segment (both a section of the fuselage and of a propellant tank) of the first BFR spaceship prototype, and Musk further stated that BFR’s structural engineers and technicians would begin fabricating the spaceship prototype’s propellant tank domes and engine section “soon”. A vast amount of work remains to be completed before that prototype will begin to look anything like an actual spaceship, and the exact fidelity SpaceX is hoping to achieve with it is unclear.
If the company tries to get as close as possible to a finished product (within reason, of course) before beginning propulsive hop tests in Texas, a very late-2019 debut of that test campaign could be a practical goal. It’s not a perfect comparison, but Falcon 9 is perhaps the best prior example of SpaceX’s speed of development, moving from structural fabrication and testing (albeit with Falcon 5 in mind) in 2006 and 2007 to a full-up orbital launch of the first Falcon 9 in mid-2010, with milestones like the first static fire of a booster octaweb and nine Merlin 1C engines 6-12 months prior.
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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
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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
