Could orbital data centers help justify SpaceX’s massive calculations?

SpaceX has he is said to have written confidential documents in an initial public offering where the company could raise $75 billion at a cost of $1.75 trillion. And according to CEO Elon Musk, orbital data centers will be a big part of SpaceX’s future.

On the latest episode of TechCrunch’s Equity podcastKirsten Korosec, Sean O’Kane, and I discussed Musk’s vision, as well as other companies pursuing similar goals.

It will take great technological development and high spending for orbital data centers to be realized, but as Sean said, with “opposition happening around the world in data centers,” executives like Musk and Jeff Bezos may be thinking that, “The engineering problem may be less than the social problem back here” on Earth.

Read a preview of our interview, edited for length and clarity, below.

Sean: This has become a trend – I would say it is moving fast – over the last half a year to a year, and we have various examples of this. We have SpaceX; I feel like somehow, Elon Musk was late with this. And for now, let’s put aside virtual machines and the potential of data centers in space. We can talk about this in a minute if we want, but –

Kirsten: We have a very good story we will link to the show notesbefore I forget. One of our most recent hires, Tim Fernholz, is amazing. He writes about physics and its limitations.

Sean: Yes, I think it’s an interesting technical problem. It’s a very difficult physics problem. It is the most complex of orbital mechanics. But it’s something that obviously a bunch of companies and people have tried and chased. (There is) what SpaceX is doing, it’s a different version of what they’re already working on with their Starlink network.

There are startups that came out of Y Combinator, which was originally called Starcloud, which was really one of the first out there to try to build a big business around this, which. we just made $170 million this weektheir calculation (to) which led them to become a unicorn.

Jeff Bezos is trying to follow suit. This is the next type of competition that we saw happening between Starlink and Amazon’s Leo satellite network, and Blue Origin has its own satellite network coming online and in the next few years.

So there’s been a whole bunch of this going on, and it seems like it didn’t even happen a year ago. I know what Elon Musk does – we know he doesn’t deal with red tape, he’s even built a data center in Memphis. Maybe now they know the difficulties and dangers you have to take to avoid being attracted.

There is a lot of opposition going on across the country to data centers. And these people say, “We have access to space, so let’s just try and do it there.” An engineering problem may be less than a development problem here (in the world).

Kirsten: And it makes for fun too, right? If a company is about to go public (public) and is working on data tools in space, this is something people can look forward to and ignore the obstacles. It feels like a company that is working on something that is not old and outdated, but shows the future. And it’s a pretty good option when you think about it.

Anthony: Not that Elon Musk is the only one who does this, but it seems that he’s gotten really good at being like, “Don’t judge my companies by how much money they’re making now, judge them by this big vision that I can see in the future.”

And going back to the point that Sean was making, I think part of the fun is (asking): How does this relate to the release of the data center? How does it relate to criticism and the idea that maybe people can’t build as many data centers as they want?

I don’t think any of us are engineers who can evaluate the progress of these plans. It has a lot of fantasy, but even when they put these plans in place, it feels like a drop in the bucket in terms of computational skill compared to what they’re trying to do on Earth. So it looks like nothing is happening where this will replace the new data in the world. It’s kind of a (…) addition to it.

Sean: The last two things I’ll say that are front and center for me are, one, we’ve seen support in some ways (from) the data center – not because of criticism, but because maybe we don’t need a lot, right? We’re seeing a bunch of play from some AI labs about, “Well, maybe we don’t need to lend a lot to this company,” or whatever. And if that becomes more true than it was five months ago, do you suddenly lose all that energy to do something crazy like put a data center in space? Making sure it works, though.

Another thing is that the idea of ​​building a large data center in space, with all these satellites forming an unnamed “data center”, is SpaceX’s business. And I think this is unique to them compared to these other companies: It is a start-up company, although they generate a lot of money from Starlink. It is the vehicle that takes the data center to the location. They start writing it off as SpaceX money.

And so it becomes this thing where, of course (Musk) wants to – whether it works or not, in the end he will have to prove – but of course he wants to send more satellites into space because it’s more money for SpaceX. And that makes SpaceX look good as a public company. And then you just kind of fall down until they come up with something to put the investors on.