Space Exploration Technologies Corp. (NASDAQ: SPCX) CEO Elon Musk warned emerging rocket companies against attempting to replicate the company’s Raptor 3 engine, describing its internal structure as deceptively complex.

Musk issued the caution after online comparisons drew parallels between the Raptor 3 and a rocket engine developed by Chinese private launch company Space Pioneer. He emphasized that while the engine appears simple externally to survive extreme heat without a heat shield, its interior requires highly modified 3D metal printing.

Technical Specifications and Design

SpaceX states the sea-level Raptor 3 produces 250 metric tons-force, or roughly 2,451 kN. The vacuum version reaches 275 tons-force. To achieve this, the company moved sensors and controllers inside the engine and beneath thermal protection, eliminating individual engine shrouds.

Competitive Landscape

The published sea-level thrust of the Raptor 3 aligns closely with the 2,450-kN figure circulating for Space Pioneer’s reported Tianhuo-21 methane engine. Space Pioneer has not yet posted Tianhuo-21 specifications on its public catalog, which currently lists TH-11, TH-12, and TH-31 engines.

Space Pioneer is developing reusable launch technology with its Tianlong-3 rocket, designed to compete with SpaceX’s Falcon 9. The Beijing-based company raised more than 4 billion yuan ($596.4 million) across 15 funding rounds as of 2024. Its Tianlong-3 first stage uses nine TH-12 liquid-oxygen/kerosene engines and targets at least 20 reuses.

Starship Development Status

Raptor 3 is central to SpaceX’s Starship V3 architecture, introduced during Starship’s May debut. In July, Flight 13 aborted less than a second before liftoff after some of its 33 booster engines failed to start. Musk stated SpaceX would replace two Raptors before retrying.

SpaceX has spent more than $15 billion developing Starship. The company now targets September 22 for Flight 14, pending regulatory approval. This mission aims to attempt Starship’s first orbital flight and deploy production Starlink V3 satellites.

Ron Baron, founder of Baron Capital, stated he will publicly support any decision Elon Musk makes regarding a potential merger between Tesla Inc (NASDAQ: TSLA) and SpaceX (NASDAQ: SPCX). Baron emphasized that Musk knows best for the companies' future.

Baron Capital has invested in Tesla since 2014 and SpaceX since 2017. The firm currently holds approximately $25 billion in SpaceX stock and $5 billion in Tesla stock. These early investments have generated around $30 billion in profits for clients, contributing to the firm's lifetime profit total of $71 billion.

Merger Stance

Baron told CNBC that he privately shared both the positive and negative aspects of a merger with Musk but declined to elaborate on those specific reasons during the interview. He recalled telling Musk, "Whatever you decide is better is what I’m going to support."

Speculation regarding the merger intensified after comments made by Musk during the All-In Podcast live summit, where SpaceX President Gwynne Shotwell was also present.

Starlink Valuation Outlook

Beyond the merger talks, Baron highlighted significant growth potential for SpaceX’s Starlink unit. He described it as one of the most undervalued assets within the company.

Baron projected that Starlink could generate $1 trillion in revenue over the next decade. He estimated this would translate into $700 billion to $800 billion in EBITDA. Applying a multiple to these earnings, he suggested a potential valuation of $14 trillion or $15 trillion.

What the Numbers Show

The scale of Baron Capital’s exposure underscores the strategic importance of the Musk-led ecosystem. With $30 billion in realized profits from Tesla and SpaceX out of a $71 billion lifetime total, nearly 42% of the firm's historical gains are derived from just these two holdings. This concentration highlights how heavily the fund's performance relies on the continued operational success and valuation growth of Musk's primary ventures.

Market Movement

SpaceX shares rose 5.3% to $151.10 on Wednesday. The stock trades within a 52-week range of $104.83 to $225.64.