SpaceX's new business: data centers in space

[thespacecow]

I totally don't buy hyperautomated lunar factories. Mars is already difficult and will probably need significant human input to make ISRU work, I think doing practical large scale industrial ISRU on the Moon is going to be quite a bit harder (PSRs are deep-cryogenic cold, Mars shallow subsurface ice is only Antarctic-winter cold; Mars has carbon and oxygen available from atmosphere, Moon doesn't; solar power is much more practical on Mars with its "normal" day-night cycle; etc)

Also, I really don't think rapid demand growth will last anywhere near long enough. GPUs on Starlink v3 could happen next year, in contrast.

I'm not saying they'll start building lunar factories immediately, I think it'll be the next step after AI satellites based on Starlink bus. Although if they plan to do this, they'll probably start precursor missions soon, such as prospecting.

As for its feasibility, I guess we'll see. There are a lot of proponents of lunar industry, so I think it's a mistake to totally write it off. It's just before there's no products they can export to gain revenue, now they may have one.

[thespacecow]

Not to mention that silicon chips need some of the most complex manufacturing processes ever invented. Multiple stages with exotic chemicals, machines and conditions. It's hard enough on Earth!

Chips have very little mass, initially you can just import from Earth.

But to make a Mars colony truly self-sustaining, you'll have to tackle chip making outside Earth sooner or later. If you have a commercial reason to do this, all the better.

I actually hope the AI bubble pops before SpaceX gets a chance to IPO.

Terrible idea, given how important AI is to US economy, both short term and long term.

It's a massive distraction.

What is the criteria to determine if something is a distraction? Why is HLS, Starlink, Starshield not a distraction, but AI satellites based on Starlink bus or lunar factory a distraction?

[meekGee]

Not to mention that silicon chips need some of the most complex manufacturing processes ever invented. Multiple stages with exotic chemicals, machines and conditions. It's hard enough on Earth!

I actually hope the AI bubble pops before SpaceX gets a chance to IPO. It's a massive distraction.

Wouldn't it be better to hope that AI doesn't experience a bubble, or that the bubble is only a consolidation that doesn't affect the overall market size?

I mean why is AI a distraction? It seems at the very least a very fundamental technology.

[steveleach]

Not to mention that silicon chips need some of the most complex manufacturing processes ever invented. Multiple stages with exotic chemicals, machines and conditions. It's hard enough on Earth!

I actually hope the AI bubble pops before SpaceX gets a chance to IPO. It's a massive distraction.

Wouldn't it be better to hope that AI doesn't experience a bubble, or that the bubble is only a consolidation that doesn't affect the overall market size?

I mean why is AI a distraction? It seems at the very least a very fundamental technology.

It can be both, tbh.

Once the hype bubble pops there are still going to be a lot of viable uses for AI, but most of the money that AI companies thought they had to spend will be gone.

[meekGee]

Not to mention that silicon chips need some of the most complex manufacturing processes ever invented. Multiple stages with exotic chemicals, machines and conditions. It's hard enough on Earth!

I actually hope the AI bubble pops before SpaceX gets a chance to IPO. It's a massive distraction.

Wouldn't it be better to hope that AI doesn't experience a bubble, or that the bubble is only a consolidation that doesn't affect the overall market size?

I mean why is AI a distraction? It seems at the very least a very fundamental technology.

It can be both, tbh.

Once the hype bubble pops there are still going to be a lot of viable uses for AI, but most of the money that AI companies thought they had to spend will be gone.

Many companies will fail, which is the nature of start-ups.

The only thing that's guaranteed is that there will be a lot of headlines dramatizing everything. Which is actually true of every weekday.

[Vultur]

Not to mention that silicon chips need some of the most complex manufacturing processes ever invented. Multiple stages with exotic chemicals, machines and conditions. It's hard enough on Earth!

I actually hope the AI bubble pops before SpaceX gets a chance to IPO. It's a massive distraction.

Wouldn't it be better to hope that AI doesn't experience a bubble, or that the bubble is only a consolidation that doesn't affect the overall market size?

I mean why is AI a distraction? It seems at the very least a very fundamental technology.

If one takes the existence of a bubble as a fact, and I pretty much do, bursting sooner is better, because it means less wealth erased and fewer plans committed to things that won't work out.

A bubble doesn't mean the technology is useless. The Internet was a bubble in the 1990s. US railroads were a bubble bursting in 1873.

"AI" is a very broad term. If "AI" in some sense is an eventual huge success but with a technology totally different from LLMs (and possibly far less energy-hungry) much of the current investment, hardware, etc.

[meekGee]

Not to mention that silicon chips need some of the most complex manufacturing processes ever invented. Multiple stages with exotic chemicals, machines and conditions. It's hard enough on Earth!

I actually hope the AI bubble pops before SpaceX gets a chance to IPO. It's a massive distraction.

Wouldn't it be better to hope that AI doesn't experience a bubble, or that the bubble is only a consolidation that doesn't affect the overall market size?

I mean why is AI a distraction? It seems at the very least a very fundamental technology.

If one takes the existence of a bubble as a fact, and I pretty much do, bursting sooner is better, because it means less wealth erased and fewer plans committed to things that won't work out.

A bubble doesn't mean the technology is useless. The Internet was a bubble in the 1990s. US railroads were a bubble bursting in 1873.

"AI" is a very broad term. If "AI" in some sense is an eventual huge success but with a technology totally different from LLMs (and possibly far less energy-hungry) much of the current investment, hardware, etc.

The market leaders, if they were based on technology rather than hype, survive.

Stocks take a couple of years to recover, but the failure of the smaller players makes it easier to become even more dominant.

Like I said before - money already raised is already raised, and revenue will be generally unaffected. It's not like people will stop talking on their phones or using the web.

You worry too much. It's not healthy.

[spacenut]

Because of the costs, regulations on earth, and power needs, data centers in space make sense.  A solar panel in space can produce 10 times more power than on earth, because of continuous 24/7 power, no cloudy days, etc.  With Starlink operational to communicate with the solar powered data satellites, communication shouldn't be that slow. 

Not only Musk but others are advocating for in space data centers. 

I am retired, but use Google AI as well as Grok.  Wife has used Chat GTP and Grok as well. Grok is more accurate.  Then, we have Amazon Echos all over the house and they are now using AI to talk to you.  So Bezos can get involved launching AI's with New Glenn for Amazon. 

AI's will need a lot of chips, programming, and will need a lot of power that America's grid cannot handle right now.  So, in space they go using solar power.  Lots of new reusable rockets coming on line, as well as SpaceX and Blue Origin.  So it looks like this is the way it will go regardless of what we think. 

[Vultur]

Not to mention that silicon chips need some of the most complex manufacturing processes ever invented. Multiple stages with exotic chemicals, machines and conditions. It's hard enough on Earth!

I actually hope the AI bubble pops before SpaceX gets a chance to IPO. It's a massive distraction.

Wouldn't it be better to hope that AI doesn't experience a bubble, or that the bubble is only a consolidation that doesn't affect the overall market size?

I mean why is AI a distraction? It seems at the very least a very fundamental technology.

If one takes the existence of a bubble as a fact, and I pretty much do, bursting sooner is better, because it means less wealth erased and fewer plans committed to things that won't work out.

A bubble doesn't mean the technology is useless. The Internet was a bubble in the 1990s. US railroads were a bubble bursting in 1873.

"AI" is a very broad term. If "AI" in some sense is an eventual huge success but with a technology totally different from LLMs (and possibly far less energy-hungry) much of the current investment, hardware, etc.

The market leaders, if they were based on technology rather than hype, survive.

Stocks take a couple of years to recover, but the failure of the smaller players makes it easier to become even more dominant.

Like I said before - money already raised is already raised, and revenue will be generally unaffected. It's not like people will stop talking on their phones or using the web.

You worry too much. It's not healthy.

You could be right, a "soft" bubble burst is a plausible scenario.

But the other outcome is also possible, where revenue *does* crash because most of it is circular financing rather than real customer demand, and there simply aren't enough *paying* customers to make ends meet - the scenario where it turns out tons of people will use AI when it's free but not nearly enough will pay high prices for it.

(Unless you mean SpaceX's current Starlink revenue. That I agree is safe. The only risk is anything specific to AI hardware.)

[hplan]

You could be right, a "soft" bubble burst is a plausible scenario.

But the other outcome is also possible, where revenue *does* crash because most of it is circular financing rather than real customer demand, and there simply aren't enough *paying* customers to make ends meet - the scenario where it turns out tons of people will use AI when it's free but not nearly enough will pay high prices for it.

(Unless you mean SpaceX's current Starlink revenue. That I agree is safe. The only risk is anything specific to AI hardware.)

I read so many comments to the effect that there aren't many paying customers for AI yet, so a crash is imminent, that I wonder what I am missing.

OpenAI's revenue is projected to be $15 - 20 billion for 2025. That's very far from "tons of people will use AI when it's free" but "there simply aren't enough *paying* customers." Revenue is also growing dramatically -- 2024 revenue was only $4 billion.

Now $15-20 billion revenue per year is not enough to pay for the $500 billion worth of data centers that OpenAI has announced,  but it represents a significant and quickly growing number of paying customers. It's a level of revenue similar to that of SpaceX, and growing faster.

No doubt there will be some startups closing down, others adjusting their focus. No doubt some investors will lose a lot of money, but others will make a ton. Maybe OpenAI's announced plans are too grandiose and will have to be scaled back. But this is all just the normal give and take of the emergence of a new branch of the economy. Call it a bubble, if you must, but AI is already changing the world in dramatic ways and I don't see evidence that it is slowing down.

[Vultur]

You could be right, a "soft" bubble burst is a plausible scenario.

But the other outcome is also possible, where revenue *does* crash because most of it is circular financing rather than real customer demand, and there simply aren't enough *paying* customers to make ends meet - the scenario where it turns out tons of people will use AI when it's free but not nearly enough will pay high prices for it.

(Unless you mean SpaceX's current Starlink revenue. That I agree is safe. The only risk is anything specific to AI hardware.)

I read so many comments to the effect that there aren't many paying customers for AI yet, so a crash is imminent, that I wonder what I am missing.

OpenAI's revenue is projected to be $15 - 20 billion for 2025. That's very far from "tons of people will use AI when it's free" but "there simply aren't enough *paying* customers."

Essentially, that $15-20B is "not that much" on the completely ridiculous scale of current AI investment.

The argument isn't that there is zero revenue, just not nearly enough. What's the lifetime of the current AI data centers? If you have to replace $800B of datacenters every five years... Then add in the cost of all the extra power generation that wouldn't otherwise be needed (US power demand had been essentially flat for 20 years before the current data center boom...)

Also, $15-20B is a projection, not reality yet. And one I doubt. First half 2025 revenue was supposedly 4.3B, and I've read that ChatGPT user growth has slowed a lot over the last few months, so I'm skeptical they'll actually hit 15-20B.

But say it does. Where do you go from there? Competition is rising. ChatGPT was the first AI to become a household name but Google is pushing Gemini hard. Even if there are enough users to pay for all the data centers (and it's not clear that there are, ChatGPT supposedly has something like 800M weekly users currently ... what's the plausible upper end?) can anyone charge enough to pay for them when competition will eat their lunch?

(And there's other issues too...)

[meekGee]

Not to mention that silicon chips need some of the most complex manufacturing processes ever invented. Multiple stages with exotic chemicals, machines and conditions. It's hard enough on Earth!

I actually hope the AI bubble pops before SpaceX gets a chance to IPO. It's a massive distraction.

Wouldn't it be better to hope that AI doesn't experience a bubble, or that the bubble is only a consolidation that doesn't affect the overall market size?

I mean why is AI a distraction? It seems at the very least a very fundamental technology.

If one takes the existence of a bubble as a fact, and I pretty much do, bursting sooner is better, because it means less wealth erased and fewer plans committed to things that won't work out.

A bubble doesn't mean the technology is useless. The Internet was a bubble in the 1990s. US railroads were a bubble bursting in 1873.

"AI" is a very broad term. If "AI" in some sense is an eventual huge success but with a technology totally different from LLMs (and possibly far less energy-hungry) much of the current investment, hardware, etc.

The market leaders, if they were based on technology rather than hype, survive.

Stocks take a couple of years to recover, but the failure of the smaller players makes it easier to become even more dominant.

Like I said before - money already raised is already raised, and revenue will be generally unaffected. It's not like people will stop talking on their phones or using the web.

You worry too much. It's not healthy.

You could be right, a "soft" bubble burst is a plausible scenario.

But the other outcome is also possible, where revenue *does* crash because most of it is circular financing rather than real customer demand, and there simply aren't enough *paying* customers to make ends meet - the scenario where it turns out tons of people will use AI when it's free but not nearly enough will pay high prices for it.

(Unless you mean SpaceX's current Starlink revenue. That I agree is safe. The only risk is anything specific to AI hardware.)

That's why I feel SpaceX is safe - it has many levels of revenue on that front:
- AI at the application level (highest potential revenue, highest risk)
- AI at the infrastructure level (this new-fangled orbital compute thrust)
- Orbital communications (virtual guaranteed monopoly, very recession proof)
- Other launch dependent streams such as commercial and military and NASA (safe, super high margins, unique capabilities)

- by association, consumers in the cars and robotics industry

If anyone survives a bubble, hard or soft, it's them

[Vultur]

That makes sense; I'd just rather not see them moving up that ladder of risk.

[meekGee]

That makes sense; I'd just rather not see them moving up that ladder of risk.

No risk, no frisk.

Every single achievement they own right now is a result of risk taking.

Want to avoid risk? That's in the other subforum.

Srsly.  At the top of Musk's resume is "risk management", not "avoidance".

[spacenut]

AI is just getting started.  I don't see an AI bubble burst for several years.  Largest AI companies will probably survive this.

[thespacecow]

Varda Space employee Andrew McCalip built a cost model for orbital data centers: https://andrewmccalip.com/space-datacenters, you can use sliders to change various assumptions and the model will calculate the cost of orbital data center and compare it to terrestrial data center.

His assessment:

Findings and Implications

Here's the headline result: it's not obviously stupid, and it's not a sure thing. It's actually more reasonable than my intuition thought! If you run the numbers honestly, the physics doesn't immediately kill it, but the economics are savage. It only gets within striking distance under aggressive assumptions, and the list of organizations positioned to even try that is basically one.

That "basically one" point matters. This isn't about talent. It's about integration. If you have to buy launch, buy buses, buy power hardware, buy deployment, and pay margin at every interface, you never get there. The margin stack and the mass tax eat you alive. Vertical integration isn't a nice-to-have. It's the whole ballgame.

[thespacecow]

Comments on the cost model by Dr. Phil Metzger: https://x.com/DrPhiltill/status/2000678045959774521

Solid snapshot analysis but I think it omits the main point. The stated assumptions include, “No adjustments for permitting or regulatory delay.” But that’s the whole reason** to build in space. My analysis also shows it’s not economically viable today, and it is the regulatory delay dynamic that flips it in about 10 years. With the SpaceX architecture of distributed compute built on Starlink, I think Elon’s 3-year estimate is also quite viable, again precisely due to the regulatory delay difference.

**The ultimate reason to build in space is to preserve the environment of Earth, but the way that decision-making gets implemented in our democratic society is through the political-regulatory system. There is no other dynamic to capture this. As damage to the environment increases and voters notice, regulation increases the delay costs, the taxes, and the restrictions on implementing the industry, which creates the economic conditions that result in a different choice. If you leave out this dynamic from a predictive model, you have left out the motive to go to space.

Note that Elon didn’t say “cheapest”. He said “fastest.” We have to include the differences in speed and the costs that accrue from delay to see how space is cheaper.

[thespacecow]

Elon replied "Yes" to this post: https://x.com/aaronburnett/status/2000970949856837991

Phil is correct. The space data center arguments generally are talking past each other. If you adjust the time frame or demand scale you can make the numbers support your perspective, whatever it is. Anyone that’s being intellectually honest isn’t saying the next 10 GWs is cheaper per GW in space than on earth, they are saying at scale the only way to build 50-100GWs per year is in space and at that scale is when it becomes cheaper.

I’ve said this many times and will continue to say it. This all comes back to demand for intelligence. If you can’t imagine needing more than 100x the intelligence we have today then you will not understand space data centers. If you can see use for 1000, 10000, or 1000000 times the intelligence then SDCs/ODCs are obvious.

[thespacecow]

Related: https://x.com/StockSavvyShay/status/2001391832241181103

Elon Musk told xAI staff that winning the AI race comes down to surviving the next 2–3 years & scaling compute, power & capital faster than anyone else.

Key points from the meeting:
• xAI could achieve AGI as early as 2026
• xAI has access to ~$30B per year in funding
• Grok 5 carries ~10% probability of achieving AGI
• Optimus humanoid robots could eventually operate data centers
• Plans to scale from ~200k GPUs to ~1M GPUs across its Colossus data centers
• Long-term concepts include data centers in space & Mars-related infrastructure

Edit: I think this tweet is based on this BI article: https://www.businessinsider.com/xai-all-hands-agi-superintelligence-funding-success-optimus-space

[meekGee]

Related: https://x.com/StockSavvyShay/status/2001391832241181103

Elon Musk told xAI staff that winning the AI race comes down to surviving the next 2–3 years & scaling compute, power & capital faster than anyone else.

Key points from the meeting:
• xAI could achieve AGI as early as 2026
• xAI has access to ~$30B per year in funding
• Grok 5 carries ~10% probability of achieving AGI
• Optimus humanoid robots could eventually operate data centers
• Plans to scale from ~200k GPUs to ~1M GPUs across its Colossus data centers
• Long-term concepts include data centers in space & Mars-related infrastructure

This is when I find myself a little bit on Vultur's side of the argument...

Musk is probably the greatest industrialist that ever lived, but when it comes to having a handle on future computer tech, sometimes I just don't know ...

Like some 10 years ago, when he said his engineers are using motion capture to do CAD like Tony Stark does, or Tesla's ever imminent self-driving capabilities.

I mean LLMs caught me off guard and I'm super impressed, but it's also clear there's no I in that AI.  So...  GAI around the corner?  I dunno.