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SpaceX rolls out Starship, stacks world’s largest rocket, and aces Starlink launch hours apart
In 15 hours, SpaceX has rolled a new Starship to its South Texas launch and test facilities, reassembled the world’s largest rocket, launched Starlink satellites to orbit, and recovered a reused Falcon 9 booster in port.
The burst of activity began around sunset at SpaceX’s Starbase rocket factory in Boca Chica, Texas when a new orbital-class Starship prototype left its ‘nest’ for the first time. SpaceX rolled the Starship – known as Ship 25 – a few miles down the highway to its nearby launch and test facilities, where workers connected it to a large crane and waited for daylight.
Around 9 am CDT the following day, October 20th, SpaceX lifted Ship 25 onto one of two Starship test stands, where it will eventually attempt to complete several qualification tests. While Ship 25 was still suspended in mid-air, the Starbase launch pad’s orbital launch tower began lifting a different prototype, Ship 24, into the air with a pair of giant ‘chopsticks’ – mechanical arms designed by SpaceX to replace one of the largest mobile cranes in the world.
Then, while it was stacking Ship 24 on top of Super Heavy Booster 7 and installing Ship 25 on a test stand, a Falcon 9 rocket carrying 54 new Starlink satellites lifted off from Cape Canaveral, Florida. Minutes prior, SpaceX finished craning a reused Falcon 9 booster off one of its drone ship landing platforms in a port ten miles south.
Starlink 4-36 was SpaceX’s 48th launch of 2022 and 56th launch in less than 12 months, so its Falcon launch program simply doesn’t have time to waste. Drone ship Just Read The Instructions (JRTI) returned to port with Falcon 9 booster B1069 about 12 hours before the rocket was transferred from the ship’s deck to a stand on SpaceX’s Port Canaveral dock space. The company will now be able to retract B1069’s legs and complete any necessary booster and drone ship refurbishment, ensuring that both will be ready for their next missions in the near future.
Back in Texas, SpaceX is scheduled to begin thoroughly testing a fully-stacked Starship rocket for the first time as early as Monday, October 24th. Ship 24 was reinstalled on Booster 7 for that purpose after SpaceX disassembled the pair for several days, possibly due to forecasts of high winds. The test campaign is expected to begin with the first full wet dress rehearsal (WDR) of a two-stage Starship, meaning that the rocket will be fully loaded with thousands of tons of liquid methane and oxygen propellant and run through a simulated launch countdown that ends just before engine ignition.
If successful, SpaceX will likely restart Booster 7 static fire testing and continue to work its way up to the first simultaneous ignition of all 33 of its Raptor 2 engines. If the pair survive WDR and static fire testing, SpaceX could begin preparing the same rocket for Starship’s orbital launch debut.
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If significant issues arise during testing, SpaceX could choose to retire Ship 24 and/or Booster 7 and move on to a new and improved pair: likely Ship 25 and Booster 8 or 9. Already complete, Super Heavy Booster 8 has been sitting untouched at Starbase’s launch site for weeks, making it uncertain whether SpaceX actually intends to test or use the prototype. Booster 9 is just one stack away from completion, at which point it will be ready to begin proof testing. According to CEO Elon Musk, B9 features significant improvements that will make it more resilient to mid-flight Raptor engine failures. It could also be the first Super Heavy booster with no hydraulic system, thanks to a new version of Raptor that replaces hydraulic thrust vectoring with a battery-powered alternative.
Starship S25 could kick off its own proof testing as early as next week. Unlike Ship 24, Ship 25 went straight from the factory to a test stand that has been modified with six hydraulic rams. Those rams will simulate the thrust of six Raptor 2 engines (up to ~1400 tons or 3.1M lbf) while the Starship is simultaneously loaded with cryogenic liquid oxygen and/or nitrogen, combining peak mechanical and thermal stresses into one test. Once Ship 25 is done, it will be rolled back to the factory for Raptor engine installation and will eventually return to the pad for static fire testing.
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
