Sam Altman and Elon Musk traded scathing posts on social media over the weekend, drawing new attention to the gap between vision and reality in the space computing business. In response to Musk accusing him of being a scammer, Altman said: “dude, you’re the one selling [sic] public market investors in near-term space data centers.”
Sam Altman and Elon Musk traded scathing posts on social media over the weekend, drawing new attention to the gap between vision and reality in the space computing business.
In response to Musk accusing him of being a scammer, Altman said: “dude, you’re the one selling [sic] public market investors in near-term space data centers.”
The term “homebody” aside, Altman is saying what many experts have concluded but public market investors seem to be ignoring: space data centers are not going to be a serious business anytime soon.
SpaceX’s plans to launch a fleet of orbital data centers to perform AI inference tasks are the main driver of the company’s $2 trillion valuation. Bullish analysts say the potential for that processing power to power SpaceXAI models or act as an orbital neocloud is unprecedented in the rise of AI.
But when you talk to experts in the field—whether they’re the entrepreneurs behind other space data center startups, the Google team developing that company’s orbital computing project, or the engineers who’ve crunched the numbers for fun—you find the same answer: This won’t make much of a dent until we have much cheaper rockets and the ability to produce high-power satellites cheaply, en masse.
Musk’s response to this is easy to predict: Starship, SpaceX’s massive new rocket, is expected to make its 13th test flight on July 16. If Musk’s team can get that vehicle to the point where it flies again and again, the data center business case could be closed.
But even if the company successfully recovers both stages of the rocket on this test flight, operational reusable flight is likely still years away, and space data center launches will likely take a backseat to SpaceX’s commitments to NASA and building its own Starlink network.
SpaceX also admitted during its IPO roadshow that Starship might not be fully reusable anytime soon and will need to launch each of its second stages during each launch, which would put a damper on inexpensive space data centers.
That’s why Musk’s retort (“we’ll start flying them next year”) falls flat a bit. There is no doubt that SpaceX could launch a satellite equipped for high-speed data processing next year, but the big question is when it will be able to launch and manufacture them at scale. And that’s probably a question for the 2030s.
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