SpaceX
SpaceX’s Starlink space internet gets new competitor with OneWeb satellite launch
The most viable competitor to SpaceX’s Starlink Internet constellation has completed a demonstration launch, placing the first six OneWeb satellites in a circular orbit 1000 km (620 mi) above Earth.
Designed as a constellation of approximately 650-900 satellites, OneWeb aims to provide uninterrupted Internet access across the world with a focus on affordability for those living without a basic communications infrastructure. Assuming OneWeb’s first six spacecraft operate nominally in orbit, the first phase of the company’s constellation could be completed by late 2020 or early 2021, leading to initial operations with customers actually able to access the internet through their spacecraft.
LAUNCH! Soyuz ST-B launches with the first batch of OneWeb satellites.
Follow Along Live:https://t.co/wpIrRq5QwC pic.twitter.com/nUuIs0vkI9
— NSF – NASASpaceflight.com (@NASASpaceflight) February 27, 2019
Compared to OneWeb, SpaceX’s Starlink constellation (even in its earliest phases) is dramatically more expansive, featuring anywhere from 2-7x as many spacecraft and an overall bandwidth that is likely even greater still. As a partial consequence, Starlink spacecraft will likely be more complex and expensive to mass-produce and operate. Combined with optical (laser) interlinks that could make Starlink truly revolutionary, it remains to be seen whether the costs of high-tech solutions can be outweighed by their intrinsic benefits.
6/6 – all 6 of the satellites have successfully separated from the rocket. They will now deploy their solar panels and begin generating power from the sun, to begin their journey to provide #ConnectivityEverywhere #OneWebLaunch
— Eutelsat Group (@EutelsatGroup) February 27, 2019
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Thanks to the relative simplicity and lower mass of OneWeb’s spacecraft, as well as a partnership with industry heavyweight Airbus Defence and Space and the partial completion of a Florida-based satellite factory, OneWeb undeniably has several steps up on SpaceX, at least with respect to the goal of reaching initial commercial operations as quickly as possible. SpaceX has already gained experience operating its first two demonstration satellites – known as Tintin A and B – for a full year on-orbit, but all that is known Starlink’s first operational launches is that CEO Elon Musk is dead-set on commencing deployment no later than June 2019. Meanwhile, the status of SpaceX’s production facilities is unclear, with two mid-sized buildings in Redmond, Washington known to be dedicated to the program.
An array of job posts and brief hints from primary and secondary sources indicate that the Starlink program is already heavily focused on ramping up spacecraft production after several years of development. It’s unclear if a planned second set of prototype satellites is still on the books, hinted at by Musk in the months after the first pair’s February 2018 launch debut.
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- OneWeb’s preliminary satellite production line. (OneWeb)
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- A visualization of satellite deployment on-orbit. (Arianespace)
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- OneWeb’s first Soyuz 2 fairing. (Arianespace)
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- SpaceX’s first two Starlink prototype satellites are pictured here before their inaugural launch, showing off a thoroughly utilitarian bus and several advanced components. (SpaceX)
Aside from the satellites themselves, prospective global internet constellation operators must face the equally critical and challenging task of developing a simultaneously high-performance and low-cost user terminal, the antenna and associated electronics that turn spacecraft signals into an accessible and reliable internet connection. SpaceX’s work in this direction has been silent, while OneWeb founder Greg Wyler recently began teasing and describing the company’s own work in that direction, hinting that his team has already arrived at a $15 antenna prototype capable of supporting 20-60 Mbps (megabits per second).
First two Starlink demo satellites, called Tintin A & B, deployed and communicating to Earth stations pic.twitter.com/TfI53wHEtz
— Elon Musk (@elonmusk) February 22, 2018
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Meanwhile, the hopeful success of the company’s first launch will pave the way for the first full launch of OneWeb spacecraft, potentially as many as 32-36 at once on Arianespace’s Russian Soyuz 2 launch vehicle. OneWeb has 21 launches manifested on Soyuz 2 rockets, scheduled to occur at a more or less monthly cadence between the first operational launch and the completion of Phase 1’s 650-satellite constellation. Shortly after the first launch was completed, Arianespace CEO Stéphane Israël announced that it had struck a deal with OneWeb as the official customer for the first two launches of its Ariane 6 rocket, meant to debut as early as 2020.
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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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SpaceX AI investment gamble will make it a big winner, firm says
