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SpaceX Starship booster survives explosion
A SpaceX Super Heavy booster was rocked by a substantial explosion and subjected to multiple fires at the launch pad during the rocket’s latest round of testing.
As of 9 pm CDT, July 11th, the fate of the upgraded Super Heavy – known as Booster 7 or B7 – is leaning towards survival but and it won’t be certain until the rocket is drained of all cryogenic propellant and potentially flammable gas and safe for SpaceX employees to approach. The incident began around 4:20 pm CDT, when Super Heavy Booster 7 (or its launch mount) unintentionally ignited a cloud of flammable gas produced during flow test involving most or all of its 33 Raptor engines. In the past, SpaceX has performed “spin prime” tests with Raptors installed on Starship prototypes, flowing high-pressure gas through the engines’ turbines to get them up to operating speeds and pressures. Booster 7’s test ended a bit differently.
When the resulting cloud of well-mixed methane and oxygen gas was accidentally ignited, it functioned like a small fuel-air bomb, rapidly combusting to produce a violent explosion and shockwave. After the initial explosion, the fire also expanded to burn as much of the resulting gas as possible, producing a fireball that briefly reached 80-90 meters (~260-300 ft) in height. CEO Elon Musk – apparently not directly participating in the test – initially stated that the explosion and fire was planned, implying that it was more or less a nominal outcome. Virtually everyone with experience observing Starship testing felt otherwise, however.
To preserve the safety of the few local residents still living at Boca Chica Village, SpaceX is required to issue printed safety warnings well in advance of Starship tests that could create a shockwave capable of shattering glass and injuring locals. SpaceX has never intentionally performed such a test without distributing those warnings and did not distribute a warning before July 11th, all but guaranteeing that no ignition event was planned. A few hours later, Musk deleted his original tweet and posted a different one, confirming that the explosion was “actually not good” and that SpaceX is “assessing the damage.”
For the most part, Booster 7 and the Starbase Orbital Launch Site (OLS) exceeded viewers’ expectations of their sturdiness, exhibiting very little off-nominal behavior after being subjected to a unexpected explosion, shockwave, and fire. Immediately after the event, B7 quickly depressurized its propellant tanks and appeared to leave those vents open, reducing the chances of the booster destroying itself if SpaceX were to lose control. SpaceX also appeared to intentionally avoid using the orbital launch mount’s (OLM) umbilical mechanism to remove propellant from the Super Heavy’s tanks, perhaps concerned that the shockwave might have weakened its connection to B7.
About an hour after the explosion, Booster 7 dumped a large amount of cryogenic liquid out of a new vent located on its aft end, producing a flood that spread around the adjacent pad. It’s unclear if that liquid was nitrogen or oxygen but either way, the emergency propellant dump appeared to cause a fire to start about 100 feet (~30m) from the booster and launch mount. That fire proceeded to burn intermittently for the next two hours, all the while posing a clear and present danger to the rest of the pad and booster if it were to spread in the wrong direction or breach the wrong underground pipe. Instead, SpaceX got lucky and the fire eventually self-extinguished.
In a worst-case scenario, Super Heavy’s engine section and 33 Raptor engines could have been seriously damaged, while the subsequent pad fire(s) could have also significantly damaged crucial pad systems, requiring weeks of repairs. The booster could even be beyond repair. More optimistically, given that SpaceX appears to have gotten lucky enough to avoid a total loss of vehicle, Booster 7 may be fine after some inspections and moderate repairs. The pad damage could also be limited to a single isolated, non-critical piece of equipment catching fire and burning to a crisp
Regardless, SpaceX will need to figure out what exactly caused the explosion and make sure that that failure mode does not appear again. In the meantime, the company recently finished stacking Super Heavy Booster 8, and Starship S24 – installed on a nearby suborbital test stand – is ready to begin its own static fire test campaign in the near future.
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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.
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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.
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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
