SpaceX
SpaceX’s Mr Steven preps for “claw” upgrade for football field-sized net
Photos from Teslarati photographer Pauline Acalin show that SpaceX’s Mr. Steven fairing recovery vessel is undergoing extensive upgrades to the arms that secure the catch net, likely in support of what CEO Elon Musk described as a factor-of-four extension of the net’s catching area.
In order to accomplish that fourfold increase in usable area, SpaceX will have to effectively double the reach of Mr Steven’s four ‘limbs’, a significant change that explains why the vessel appears to have had all four arms amputated. Intriguingly, the vessel’s upgrades are taking place at SpaceX’s recently-leased Berth 240, the company’s preferred location for berthing its fleet of rocket recovery vessels, conducting Falcon 9 booster recovery ops, and -eventually – the first Mars rocket factory in 2019.
As of now, it’s unclear what approach SpaceX will take for upgrading Mr Steven’s arms – with only one detached example visible at Berth 240, it appears that the company will either add on to the hardware already built for the boat or start from scratch in order to optimally extend their reach. A new net, of course, will also be needed to span the fourfold increase in area – in other words, up to roughly 6000 square meters, 65,000 square feet, or 1.5 acres. I have little doubt that SpaceX will be able to reliably catch Falcon 9 payload fairings with a net as large or larger than American and European football fields (~1.3 acres vs. ~1.7 acres).
An artist rendering of a Falcon 9 fairing parasailing towards Mr Steven’s net. Original photos by Chuck Bennett (Instagram @chuckbennett) and SpaceX. (Chuck Bennet/SpaceX/Eric Ralph)
SpaceX’s has roughly four weeks until their next West coast launch and thus another opportunity to attempt to catch a Falcon 9 payload fairing. That mission is currently scheduled for early July 20th from Space Launch Complex 4E (SLC-4E) in Vandenberg Air Force Base. Teslarati’s West coast photographer will continue to check up on Mr Steven to judge whether the vessel will be ready in time for launch.
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- One of Mr Steven’s four amputated arms, removed in preparation for upgrades. (Pauline Acalin)
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- A sad Mr Steven sits beside Berth 240, sans arms. (Pauline Acalin)
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- Berth 240 demolition begins! (Pauline Acalin)
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- A Falcon 9 fairing overlooks SpaceX’s Berth 240 construction progress, June 20th. (Pauline Acalin)
BFR factory construction
Meanwhile, serious demolition has begun at Berth 240, likely preparing a number of basic necessities before any major building begins. A giant pile of broken concrete lays witness to that process, likely involving the appraisal, repair, and replacement of utilities and pipe systems currently buried under the facility. Forlorn Falcon 9 payload fairings – pulled intact out of the Pacific Ocean – can be seen stoically looking on while construction crews begin the first steps of a process that will, at least eventually, culminate in the completion of a factory for the rocket that will obsolete Falcon 9, Falcon Heavy, and their fairings.
Based on land use approvals published in March 2018, the construction will be cut into two phases, with phase one focusing on a smaller, intermediary building capable of support limited Falcon recovery work and potentially initial BFR prototype construction, allowing that process to be moved from the temporary tent it currently is housed in. Phase 2 would see a larger build constructed around the preceding facility, necessitating the demolition of one of Berth 240’s historic buildings. Per the filings, Phase 1 is expected to be finished within 16-18 months of approval, placing its completion sometime in mid to late 2019.
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- Note the fencing around the actual foundation site for SpaceX’s proposed BFR factory. (Pauline Acalin)
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- Renders of the proposed BFR factory at Berth 240. (SpaceX)
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- Blueprints of the proposed BFR factory at Berth 240. (SpaceX)
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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Tesla has one big financial question to answer for investors: Morgan Stanley
SpaceX AI investment gamble will make it a big winner, firm says
