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SpaceX’s Starship prototype is looking increasingly rocket-like as hop test pad expands
As SpaceX’s South Texas operations continue full steam ahead in pursuit of the first integrated hop tests of a full-scale Starship prototype, the company’s Starhopper and its complementary launch/hop pad are dramatically and visibly evolving on a daily basis.
This week’s progress has been signified by the installation of familiar rocket hardware on the Ship and a burst of construction – centered around pipelaying, plumbing, foundation work, and berm-building – at its pad. Just a few hundred miles north of Boca Chica, SpaceX’s team of propulsion engineers and technicians reached their own dramatic milestone, conducting the first static fire of a finalized version of the Raptor engine set to power Starship and Super Heavy (formerly BFR).
2-4-2019#SpaceX #TheFuture pic.twitter.com/0YBxk5QXD3
— Austin Barnard🚀 (@austinbarnard45) February 5, 2019
A pad fit for a Starhopper
In the last ~10 days alone (Jan 24-Feb 4), SpaceX pad construction workers and contractors transformed the former dirt mound from a generally flat, planed surface with a spattering of shipping containers and building materials into a hive of welding rigs, propellant and water tanks, major plumbing progress, shaped earth, and the beginnings of new concrete foundations. Thanks to local student Austin Barnard’s reliable drone photography, that pad-specific progress can be more properly visualized.
Taken on January 24th and February 4th respectively, the devil is definitely in the details when it comes to SpaceX’s prospective Starhopper pad development. Most notable is the progress made with the rapidly developing propellant plant and ground systems infrastructure in the left half of the images, marked by hundreds of feet of freshly-installed piping meant to support the process of fueling Starhopper with liquid methane and oxygen. For a rocket as powerful as Starhopper (even with just three Raptor engines), cooling both the propellant and the concrete launch and landing pad is no less important, visible in the shape of three large water tanks (lefthand foreground) and a smaller radiator stack (just to the right of two taller, skinnier white tanks.
Aside from the rapid rise of the first BFR propellant farm and its supporting equipment, SpaceX has progressed into the installation of a trio of concrete foundations just to the right of the dirt berm and propellant tank area. Standing as close as it is to said propellant tanks, it seems unlikely that the new foundation-laying is related to the pad (or a stand) meant to support early Starhopper hop tests, although SpaceX’s Falcon 9-era Grasshopper and F9R hop test vehicles operated about the same distance from its propellant infrastructure. SpaceX’s South Texas site also features a sort of satellite pad at its east end (the right side in attached photos) that could have a future as an integration hangar or a secondary landing zone to allow for Starhopper to perform divert tests.
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- Rockets are perhaps even more capital intensive. (SpaceX)
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- BFR’s booster is at least three times more powerful still than BFS at liftoff. (SpaceX)
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- BFR (2018) breaks through a cloud layer shortly after launch. (SpaceX)
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- (SpaceX)
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- BFR’s booster, now known as Super Heavy. (SpaceX)
Depending on whether SpaceX actually intends to develop the land shown above into an actual full-scale launch facility for BFR (Super Heavy and Starship), it could also remain generally unchanged until Starhopper’s hop test program has been run to completion, at which point everything seen above would likely be rebuilt from scratch to accommodate for any drastic changes in function. SpaceX’s Boca Chica might simply be too small to support a pad capable of launching Super Heavy (nearly twice as powerful as Saturn V at full thrust), measuring in at considerably less than ~10 acres of usable area compared to LC-40’s ~20 acres and Pad 39A’s ~50+ acres. CEO Elon Musk has also hinted at using a giant floating platform for early orbital BFR launches, although that might prove even harder (and more costly) than building a traditional land-based pad.
Becoming a rocket
Meanwhile, the aft engine/fin/tank section of SpaceX’s Starship prototype (unofficially nicknamed Starhopper) has experienced a stream of hardware additions and improvements, modifying its relatively awkward and unfinished steel base with what appear to be Falcon 9-sized quick-disconnect umbilical panels, a functional propellant tank header, and mounting hardware for carbon-overwrapped pressure vessels (COPVs). By using hardware that is proven and easy to manufacture, SpaceX can save a huge amount of time that would otherwise need to be spent engineering subassemblies that (at risk of undervaluing the challenge) are generally known-quantities – more a matter of time and effort than an actual technical hurdle.
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- B1048’s second umbilical panel (blue for oxygen). (Pauline Acalin)
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- Falcon 9 B1048 displays one of two umbilical panels (red for kerosene) after its first launch. (Pauline Acalin)
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- Starhopper’s partially completed umbilical panel as of Feb. 4th. (NASASpaceflight – bocachicagal)
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- A SpaceX technician or contractor is pictured here cutting out sections of Starhopper’s steel hull to route umbilical panel piping. (NASASpaceflight – bocachicagal, 02/03/19)
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- Starhopper also had a tank header installed on February 5th, complete with pressure regulation and propellant feeding hardware. (NASASpaceflight – bocachicagal)
While they are clearly still in a rough, unfinished form, Starhopper’s umbilical panels are already easy to recognize when compared alongside Falcon 9’s iconic red and blue panel pairs. In essence, whereas Starhopper has been a largely unknown quantity with no familiar aspects since it began to come together late last year, the Starship prototype has recently had hardware installed that is finally revealing subtle SpaceX signatures in its design and assembly.
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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
