SpaceX
SpaceX’s Starship hopper steps towards first hop with several cautious tests
SpaceX’s team of South Texas engineers and technicians have dived into a program of critical pre-hop tests of the first assembled Starship prototype, a partial-fidelity vehicle – known as (Star)Hopper – meant to soon perform low-altitude, low-velocity hop tests powered by Raptor.
Despite a lack of official information is known and SpaceX’s general silence – even to local residents – about Starhopper’s testing, some barebones insight can be derived from what has and hasn’t been done or seen over the past seven days of testing, as well as five apparent wet dress rehearsals (WDRs). To verify the operational integrity of Starhopper and iron out best practices for what is effectively a one-off mobile test stand for Raptor, these WDRs (and one more active test) have seen the unusual prototype filled with some amount of liquid oxygen and methane propellant, taken to flight (hop?) pressures, and generally monitored closely to gather valuable telemetry and judge Starhopper’s condition and hop-readiness. Aside from Hopper, these tests also serve as a shakedown for complex pad and support facilities sprung up from a dirt pile in barely three months.
Fueling the beast
Starhopper’s five (ish) wet dress rehearsal tests have demonstrated an intriguing level of caution relative to the last few months of BFR program development. Depending on how much propellant SpaceX has been filled the vehicle with and how much of that propellant they are able to recycle after each attempt, each dress rehearsal could cost upwards of six figures (USD), while also putting the unusual steel structure through multiple stress cycles.
No official info has been provided beyond a brief indication that SpaceX means to static-fire Starhopper before transitioning to tethered hops, meaning that it’s quite difficult to determine what exactly the testing plan and schedule are. In other words, these ~5 WDR tests could have been the plan all along, or each test could be producing data that has lead launch engineers to scrub Raptor ignition attempts nominally planned at the end of each rehearsal. For an entirely new and unfamiliar design like Starhopper, it seems likely that at least one or two WDRs were planned before any attempt to static fire the hopper’s lone Raptor, although it could also be the case that – much like most SpaceX static fire attempts – the WDR was simply built in as a precursor to ignition, barring off-nominal telemetry.
The third and most visibly active test yet (above) occurred on March 25th and saw Starhopper briefly vent a cloud of gas from Raptor, with some viewers guessing that a Raptor preburner (partial ignition) test had been observed. It’s unclear whether this Raptor (SN02, the second produced) completed acceptance testing in McGregor, Texas on the way from California to Boca Chica. If not, then the caution on display in these WDR tests (i.e. no visible Raptor ignitions) could also be a side-effect of
The fidelity of Starhopper relative to its orbit-facing successors is also unclear. If the prototype’s structures, avionics, and plumbing are actually more indicative of the finished product than they appear, it’s possible that SpaceX tendency towards accepting the destruction of test hardware is in a bit more of a cautious state than usual, with a total loss of vehicle amounting to a significant technical setback and schedule delay. Based on the vehicle’s appearance and the apparent decision to entirely set aside the idea of installing a new fairing on Starhopper, it seems far more plausible that the prototype is more of a glorified mobile test stand for Raptor engines and Starship avionics (software) than anything else.
If Starhopper really can’t function as something more than a marginally mobile test stand for Raptor(s), then the value of actually hopping the craft could be quite minimal, perhaps offering useful data on Raptor’s control loop and behavior during flight operations. Still, CEO Elon Musk has stated several times that SpaceX has gotten good enough at the actual task of landing rockets vertically that it’s effectively a known quantity for Raptor and BFR, whereas the exotic atmospheric operations planned for Starship are the main uncertainty for successful recoveries.
Simultaneously, SpaceX is building the first orbital-class Starship prototype just a few thousand feet away from Starhopper’s new roost, utilizing stainless steel sheets almost three times thinner than the quarter-inch-thick steel the first prototype was built out of. It’s likely that Starhopper’s career will thus end up being rather short, given that the completion of the first near-final Starship would further minimize the low-fidelity hopper’s utility. If it’s actually meant to reach orbit, the newest Starship prototype will require the tripod fins and canard wings shown in SpaceX’s latest renders in order to safely land for future test flights, while Starhopper appears to be far too heavy and simplistic to warrant the expensive and time-consuming task of outfitting it with aerodynamic control surfaces and a new nose cone capable of surviving the associated forces.
While additional testing may be done on Friday, March 29th, it appears that the next attempts for the first static fire (and hop tests) will begin next week (likely Monday) – SpaceX is unlikely to test on weekends due to the potential disruption it could cause for beach-going locals.
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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
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.
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.
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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