Greetings, Earthlings: Philip Johnston of Starcloud on Data Centers in Space

[00:00] The problem with doing this build out on Earth is that the marginal cost on every additional data center goes up every time you add one because we're using all the easy places to build energy projects. In space, the marginal cost goes down for every additional unit because you're now manufacturing at rate and the more starships you fly, the cheaper it gets and all the rest of it. And so there comes a crossover point where it just makes zero sense to continue building things on Earth. [00:30] I think it will be close to a trillion dollars per year of CAPEX spend within 10 years being deployed in space. So by far the large market opportunity ever. [00:39] *music* [00:55] - We're thrilled to have with us today, Philip Johnston, founder and CEO of StarCloud. You were the first to put up data centers in space. And just a few months ago, your first data center, StarCloud One, sent back the message to Earth. [01:07] Greetings, Earthlings, or as I prefer to think of you, a fascinating collection of blue and green. What a poetic thing to think about AI in space, looking back at us. Congratulations on what you've done. I'm excited to ask you all about data science in space. [01:22] for this episode, maybe for us to get started. Why build data centers in space? [01:26] Yeah. So firstly, thanks so much for having me. It's freaking awesome to be here. So a quick background on myself. I first, I mean, I've been interested in space my whole life. I actually spent a few years with McKinsey with the space agencies of the different governments around the world. And that's where I started to notice that the launch cost was very rapidly coming down.

[01:56] It just blew me away the scale of the new sort of gigafactories they're building. I think they're planning to build three starships per day or something on that order. And so the coming capacity and the... [02:07] potential launch cost is, you know, orders of magnitude off where it is today. And so, you know, I started thinking about, okay, well, what [02:14] is that going to enable what new businesses will that enable? And with my co-founder Ezra, um, uh, and Ezra and I go way back. We grew up in the same place in the UK. Um, [02:24] We started looking at the concept of space-based solar, which is where you have these huge solar panels in space, and then you somehow beam that power down. It's not really a new idea. I mean, people have been looking at this since, I think, Isaac Asimov in the 40s was talking about it. Yeah. [02:39] The problem with space-based solar is you lose most of the energy and transmission from space to Earth. And we very quickly realized, okay, well, [02:45] Once we get that power down, most new energy projects on Earth today are being built to power data centers. So either directly or indirectly, that power is going to be going into data centers. And so if we can find instead a cheap way to get the data center to space, we don't lose all of that power and transmission. We can consume that power close to the source. And that then became the basis of a white paper that we put out in 2024. And from there, that's how the company got going. Well, let me ask you. So there's a distinction. [03:15] it is possible to do data centers in space. Why do we need to do data centers in space? Maybe possible. Why do we need to do it? Why do we need to go to space? Yeah, that's a great question. The main reason is we are very quickly running up against constraints on where and how we can build new energy projects terrestrially to power data centers. So for example, if you want to build a new 100 megawatt energy project, you're looking at a five to 10 year lead time just on the

[03:45] to cover 10 square kilometers of countryside with solar panels. There's a lot of people who are going to be very annoyed about that. And so you just have this, you know, we're very rapidly plowing towards a... [03:57] a brick wall where it's going to be extremely difficult to build new energy projects. We've already built in the easy places. If we could wave a magic wand and remove the regulatory constraint. [04:06] What's the next constraint we run into? [04:09] Well, it is actually just cheaper to build things in space once the launch cost gets below a certain point. So, for example, with... [04:16] terrestrial solar, which is the cheapest form of energy we have, you've got three big costs. The first one I mentioned, which is the cost of permitted land. The second is the cost of battery storage and backup power. And then the last is the cost of the solar cells themselves. So in space, number one, we don't need permitted land. Number two, we don't need batteries and backup power, because we're 24 seven in the sun. [04:36] And then lastly, we need eight times less solar because one square meter of solar panel in space produces eight times the energy of one square meter of solar panel on Earth. And so there's a break even point where the launch cost, which is our main additional cost in space, where the launch cost comes below the cost of those three factors. We see that break even to be around $500 a kilo. But as the cost of permitted land goes up, which it is going through the roof right now, that break even point actually comes even closer to $1,000 a kilo. [05:03] But as I say, even if you're... [05:05] permitted land cost is zero, you still have those other two factors. [05:09] And so at some point if you're going to build data centers anywhere, you know, once the launch cost is below a few hundred bucks a kilo, [05:15] you're going to do it in space because it's just cheaper.

[05:18] What have you learned about maintenance in space? [05:21] Yeah, it's a great question as well. So for maintenance [05:25] will be operating very similar to the way that Starlink satellites work in the initial years. We're not going to have robotic maintenance or anything for the first few generations at least. And so that means we need to have redundancy on the critical systems and then we over provision things which fail over time like solar panels, you lose a few percent per year. It's very, very important that the chips do not have a higher failure rate in space than they do on Earth, because the chips are one of the largest costs in this. And so, [05:52] a huge amount of our time probably 70 of our engineering time is going on to the heat problem and the other 30 is going on to [05:59] making the chips as reliable as possible in space. And that means a whole bunch of testing in different particle accelerators. We did two rounds of testing at the cyclotron proton beam accelerator in Knoxville, one round of testing at the heavy ion particle accelerator in Brookhaven National Lab. And we run it in 24 hours. We can simulate five years worth of radiation. And with that, then all of that data then goes into... [06:21] informing our choice on shielding and other software for bit flip mitigations and things like that. But in terms of what we've learned on the first satellite, it's actually the H100 that we have on orbit right now, [06:34] We've not had a single restart failure yet or issue that needed a restart from the chip itself. There are other [06:41] areas which we may need to put a bit more attention to, for example, the power delivery and solid state drives. But the actual chip itself is extremely resilient. And GPU workloads in general are very resilient. And the reason is they're stochastic in nature. And so if you, for example, if you type into ChatGPT, write me a poem about space, it will give you the stochastic.

[07:02] Two different poems. The... [07:04] The quality of the perm will be the same, you know, we have the exact same quality of the output, but the specific instance will be different. And so with a bit flip, [07:13] on any part of that, or on most of the parts of that workload, it actually doesn't make a difference to the quality of the output. [07:20] So it's actually surprisingly... [07:24] Brazilian. [07:27] You said you spend the bulk of your engineering time on the heat problem. Yeah. I think most people have this... [07:32] notion that space is cold, and so therefore it should be an easier problem. When Sonia says most people, I thought that was the case until a few months ago. [07:43] So can you just talk about... [07:45] What exactly is the heat dissipation problem and what are you doing to solve it? [07:49] Yeah, for sure. So... [07:51] Yeah, as you mentioned, space is code. [07:53] In general, that's actually... [07:55] once you get far enough down this rabbit hole, that ends up being great. What's not great is that space is a vacuum. And so obviously like a thermos flask is designed that way because a vacuum is an insulator. And so the only form of heat dissipation you can have is infrared radiation. And so everything... [08:12] in this world glows in infrared if you had a camera on your face your face would be glowing in infrared um and the same is true in space and the amount that it glows is proportional to the temperature differential between the temperature away from your faces or away from the satellite versus and it actually scales with the fourth power of the temperature so a very small increase in the temperature increases the heat dissipation by a huge amount and so um what one of the critical

[08:42] ways you can do that either you can run try and run the chips as as hot as possible the problem with that is you the chips are you know have a shorter lifetime if you run them hot the other thing you can do is there's a few ways to artificially boost the temperature of the radiator so things like heat pipes heat pumps sorry which you can take for example 60 degree [09:01] fluid from the chips and then you can turn that into 100 degree radiator temperature with heat pumps. [09:08] Got it. And so would you say the heat dissipation problem is like a solved problem for you all now? You obviously have one GPU in space. What is it going to take to solve the problem for, you know, eventually, hopefully gigawatt scale data centers in space? Yeah. How does it change as you scale? Yeah. So the first one actually has a very different thermal management system than the next one coming up. The first one, we've submerged the entire motherboard, power systems, GPU, and everything else in this phase change material. It's like a [09:37] a material that goes from solid to liquid as it heats up. We can't run that continuously though, that was merely just to prove out that this works. The second one is much closer to the end state, which has got this enormous low cost and low mass deployable radiator. So it has liquid, we've got a custom heatsink next to the GPUs, runs past, this fluid runs past the GPUs and then out to this extremely large deployable radiator. From [10:04] That one to the next one, just scaling it up, it actually is pretty simple. And so, yeah, we've tested this, you know, in thermal and vacuum chambers and it works. We just need to now put it on orbit and make sure it actually works on orbit.

[10:17] And that's going to happen later this year. [10:19] Awesome. And how much, I guess, relatedly, [10:23] You have one GPU up in space currently. Do you see yourselves launching? Oh, you have five now. No, there's five NVIDIA GPUs on that first one. The H100 is the one that gets the press. I see, I see. [10:35] How much, I guess, what is the launch capacity, so to speak, of what can you get up in a single payload and how big these... [10:41] you know, do you think these individual data centers can get? [10:44] Yeah, so we're designing for the StarCloud 3... [10:47] The next one that we're launching is around 8 kilowatts, so pretty small still. The one after that, which we're now designing, is the StarCloud 3. We can fit 50 of them per Starship, and they fit out of the Pez dispenser form factor, that door that Starship has, that little slit. So each one of those is about 200 kilowatts, about 3 tons. And so if you have 200 kilowatts per unit, [11:11] per StarCloud 3 satellite. And it's all for inference, essentially. That means you can fit 50, so it's about 10 megawatts per Starship launch. And so once Starship is flying at rate, we're expecting to fly hundreds of these per month. And so you're talking several gigawatts of new capacity per month. [11:27] tens of gigawatts of new capacity per year. [11:29] So you mentioned it's all for inference. I was wondering about that because pre-training you want contiguous compute might be tough if you're sending everything up in a space. Inference you want low latency. There's some... [11:40] There's a speed of light component getting information to and from space. Is that a bottleneck at all, or is it low latency enough that it doesn't matter for inference?

[11:50] It's as low latency as Starlink. So if you can do any inference workload through Starlink, if you were using ChatGPT on your phone through Starlink, for example, it would be exactly the same. So sub 50 millisecond latency, 20-year-old-earth. And that means any, like if you have a Zoom call, that could easily happen with 200 millisecond latency and you wouldn't notice the delay there. So basically any inference workload, voice agents for customer service or back office business processing agents, [12:20] or video generation or Charged BT or anything else can be done with this constellation. And then maybe a slightly different question, but kind of on this vein. [12:27] If you had a trillion dollars, [12:29] Yeah. [12:30] sitting in a bank account. [12:32] And you had to use it. [12:34] to build the compute backbone for AGI. [12:37] How much of that trillion dollars is going into space? 100%. Okay. All right. Paint that picture for us. I mean, we really are talking about by far the largest market opportunity ever. So we are talking about trillions of dollars per year of capex spend going, my – [12:52] Best guess is that within five to ten years, [12:55] at least half of all new compute capacity is being deployed in space for the energy. So the problem with doing this build out on Earth is that every additional data center you add to the grid, like the marginal cost on every additional data center goes up every time you add one because we're using all the easy places to build energy projects. In space, the marginal cost goes down for every additional unit because you're now manufacturing at rate and the more Starships you fly, the cheaper it gets and all the rest of it. And so...

[13:25] there comes a crossover point where it just makes... [13:29] It makes zero sense to continue building things on Earth. [13:32] So, [13:33] I think it will be close to a trillion dollars per year of capex spend. [13:37] within 10 years. [13:39] being deployed in space. [13:40] So by far the largest market opportunity ever. [13:43] Where and when do you think we will first cross over? When I say where and when, I mean like what geos will become untenable and therefore you'll need to go up into space. [13:53] Um... [13:54] As soon as Starship is flying frequently, it will be cheaper to build data centers in space. So my guess for it looks like the first Starlink payloads will be the end of this year, early next year, Starlink V3. And then, as I understand, it will be 12 to 18 months after that, the first commercial payloads are going up. And so that will be. [14:13] um, [14:14] Yeah, on the order of mid to late 2028. And then once it's flying frequently, it becomes way cheaper. [14:20] Do you think that there's... [14:21] you know, stuff that needs to be solved in terms of data transmission, [14:25] Like, do we need optical lasers sending data back and forth up there in order to kind of [14:31] once we're operating data centers at scale in space? Now those all solved problems? - Mesh network in space. - That's solved, yeah. It didn't used to be until two or three years ago, but you know, Starlink has basically solved that. And there's a bunch of other constellations coming online, Amazon, Leo, Kepler. And also once we have a few of our own satellites, [14:48] we can do our own optical backhaul. So that, yeah, that problem would have been a big problem until quite recently. And so each Pez dispenser will be its own...

[14:58] data center, do you see them ever coming together? You had that picture, that concept photo in your first white paper. Do you see them being able to [15:07] dock onto each other eventually. Yeah. Um, [15:09] It doesn't really make too much sense to do that initially because the only reason you would do that is if you want to train a large model in space. And to train a frontier model, you need... [15:18] whatever the largest data center on earth is you need at least that in space so right now that might be like 300 megawatts or something [15:24] you know, it's going to be a long time before we're going to be able to dock together 300 megawatts structure in space. And by that time, the biggest one on Earth will probably be three gigawatts. So it's like a moving goalpost. And the other thing to say about that is, [15:36] Training at the end state will be less than 1% of all AI workloads that are being done. And so it's just not a very good market to go after anyway. [15:43] um, [15:44] Yeah. [15:45] We showed it in the initial video because we didn't want people to come back and say [15:49] you know you can't do training in space and you're like well you could if you wanted to but it's probably not ideal for the initial it's more of a provocative photo yeah um what about you mentioned at the very beginning robots like do you think we'll end up having [16:02] maintenance robots in space to maintain these data centers? [16:06] I don't think we'll necessarily be maintaining our small inference systems. [16:10] nodes [16:12] But certainly we will have fleets of robots building large structures in space. I mean, they'll definitely be on the moon. Like if you're going to build big manufacturing facilities on the moon, essentially something like Optimus will be doing that. Like an Optimus robot doesn't require too much modification to work in space. You just... [16:27] essentially put it in a spacesuit and that takes care of thermal and radiation aspects of it so you don't see optimus going to go maintain your not really because they're too small each one's only 200 kilowatts so we just need to make sure that they're um if we docked it together then yeah you could have optimus maintaining it but you wouldn't

[16:45] fly-ups between each of ours and [16:49] um well maybe you would i don't know that starts to sound a bit sci-fi what's the what's the useful life on them and how do you retire them [16:56] So we're designing it to be the same as the useful life of the chips, so five, six years. Potentially, possibly longer, actually, in space, because our marginal cost of energy once we're launched is zero. So there's an argument to be made that we can run them longer. But end of life for now is the same as Starlink, so deorbit. There is a... [17:15] you know another possibility which is putting them in some kind of um graveyard orbit they call it um [17:21] But for now, it's just the orbit. [17:23] What goes into making a great, like you guys have a bunch of mechanical engineers, satellite engineers. Like what goes actually into the engineering of solving this and what are the core competencies you look for? [17:35] Yeah, so as mentioned, the two biggest challenges are the thermal and the high radiation environment in space. So for the thermals, we've got, for example, the guy from NASA's Jet Propulsion Laboratory who designed all of the thermal system for the Europa Clipper mission. That was NASA's largest, most expensive deep space mission ever. He also designed... [17:54] the thermals on the Firefly lunar lander, and for three of the NASA payloads. And then another guy from Amazon Kuiper, or Leo constellation, now who's lead thermal engineer there. And then a bunch of people from SpaceX, for the thermal side of things. And then for the radiation and testing side of things, [18:14] My co-founder, Ali, has previously launched a bunch of GPUs and did all this kind of particle-accelerated testing and stuff. Has anything surprised you from the testing?

[18:24] a few things but it's [18:27] This is like our core IP. Yeah. [18:32] Yeah. [18:32] We're a bit tight-lipped about some of the things. [18:35] It's okay. It's a friendly audience. [18:38] You very much seem like a SpaceX... [18:40] Elon Maxi based on some of the things you've said. What do you think of some of the alternative space launch companies? [18:47] I'm very, you know, [18:51] hopeful and positive about them in general but i mean elon i mean you guys have a massive space exposition so you guys are presumably spacex maxis too um and what a great investment from sean by the way like i think it was sean um [19:05] Um... [19:07] SpaceX, like I think Sean said, it's the best company ever. I do think SpaceX is the best company ever. I think they're unbelievable what they're pulling off. So they're just so far ahead of everybody else. The other companies that could do... [19:20] You need a reasonable upper stage to be anywhere close to cost competitive. So you have Stokespace, Relativity is potentially going to look at it. [19:27] I think that New Glenn is going to, the Blue Origin Rocket, [19:31] They haven't announced it, but they've started hiring for Heat Shield. [19:35] engineers and you would only do that if you have a reusable upstage [19:37] Um... [19:39] and then Rocket Lab I don't think are even trying. So [19:42] Even if they were to start now, you've got a 5-10 year long development cycle on a reusable app stage. And to that end, you guys partner with them... [19:50] They are your launch partner. [19:53] Um... [19:54] How did it feel to...

[19:55] To be building something where now Elon is also... [19:59] stated that his intention is to put a lot of data center capacity up in space. Yeah, yeah. So SpaceX are amazing partners. Our company definitely wouldn't exist without the Rycha program. In general, they're extremely [20:12] Um, you know, [20:14] They work hard to foster the whole ecosystem. I mean, they launch their own competitors. They launch Amazon Leo, the Kuiper constellation. They launch OneWay, which is both direct competitors to Starlink, and they open source their patents and things like that. So, yeah, we love working with SpaceX. In terms of the way I think this plays out, because... [20:35] You're right, now they're going extremely aggressively into building their own data centers. So it's basics. [20:40] will have a lower cost base than us because they own the launch. [20:44] I think the way that we fit into this is, is kind of twofold. Um, [20:48] Number one, SpaceX are mainly going to be serving their own workloads, so Grok and Tesla and others. They may offer a third-party cloud service, but as I understand, there's no intention to... [21:00] offer a box that people can put their own chips on and then which is the core um offering that we have which is we essentially give people a box and it has power calling and connectivity and then they can put whatever chip architecture they want in there and sell to whichever customers they want so you can think of us more like equinix while spacex might be more like a aws or something like that um but um so they will have a lower cost base than us but we will have a lower cost base than all of the hyperscalers so the way i see this playing out if it's true that on a sort of

[21:30] most new data center capacity is being deployed in space. What's going to happen is in three years, once Starship is flying frequently, all of the hyperscalers are going to realize this. [21:39] And they're going to be like, [21:41] Oh, no. [21:42] shit like if we don't have access to space compute we are screwed because we can't scale anywhere near as fast as those that do and so at that point they have three options i think so one is [21:51] You know, they can... [21:53] pay Elon for his space data center capacity. And for sure, some of them will do that. That would be a good option. Some of them won't. You know, I think lots of... [22:01] It seems like unlikely that OpenAI or Meta or Google or Microsoft would do that. Or they can start building their own satellites. Again, some of them might do that. [22:09] It seems unlikely. I mean, Google, for example, say they're doing what we're doing. What they're actually doing is they're paying Planet Labs to do a demo in 2027. [22:18] Which, I mean, yeah, it seems like they're not moving particularly aggressively if they are doing that. [22:23] Or they'll look around and they'll say, okay, who has the most [22:25] we need to move quickly on this, like who has the most advanced capability in the market. And at that point, we will be by far the most advanced in terms of what's deployed on orbit and the engineering team and all the IP that we have. [22:35] So I think at that point we've become an interesting partner with those guys. [22:39] And I do mean partner, not necessarily just acquisition target. I think there is a... [22:43] a customer relationship where we provide the infrastructure and energy and they do the [22:50] the cloud providing part of it. - Yeah, and I have the business model question then. Why choose the Equinix business model versus AWS, or even Akamai? [23:00] It's a good question. Yeah, we've been certainly looking at the cloud, like being a cloud provider ourselves. In the initial early days, we will probably have to do something like that because nobody's going to trust us with their chips until we've proved it works for a few times.

[23:16] We would much rather be an infrastructure and energy play than a cloud provider, and the reason is [23:21] How cool, like... [23:22] The core IP of the company and the core skill that we're good at is building satellites that can dissipate heat and protect you from radiation. We don't necessarily want to rebuild. AWS has spent 20 years building an incredible application layer on top of AWS. And customers don't necessarily want to not be able to use that functionality. And so the other point of it is the most expensive part of all of this is the chips. [23:48] And we would rather have somebody else finance the chips and they can decide whatever chip architecture they want and all the rest of it. [23:56] Maybe much further down the line it will make sense for us to have a cloud offering, but [24:03] Initially, I think there's a great business and it's also much higher margin. Depending on which way you look at it, it can have a much higher margin. Okay. I have a question about real estate. Yep. [24:12] How does real estate work in space? [24:14] Because earlier you were saying one of the issues on Earth is running out of physical real estate to go build data centers on. How does real estate work in space? And as space gets more crowded, how do you think it will work? Yeah. I mean, for now, it's essentially first come, first serve. And so we've just filed for a constellation of 88,000. It would allow us to deploy about… Who do you file with? [24:37] In the US, you file with the FCC. If you're going to interact with US ground stations, you have to. If not, which I've seen in the state, we won't. You can pick any regulator in the world. And then they are under the ITU, the global governing body. It's weird that the FCC manages this. I don't know.

[24:55] also think that's weird. I think it's a legacy from the days when [25:00] The only thing satellites did was... [25:02] communication and RF spectrum and things like that. Now they're doing much more. It's a bit of a legacy hangover that the FCC is. So real estate today is first come first serve. How about 10 years from now? 10 years from now, I expect it will be... [25:17] Certainly the most valuable slots will get filled up and then it will probably be that whoever got them first [25:23] will have the right to sell them. [25:25] Pat's about to figure out how to be our overlord, our landlord in space right now. Big time space commercial real estate guy. [25:35] All right. Question about security. How does security work in space? So let's say a bunch of critical workloads are running on your satellites and somebody decides to attack them. How does that work? Yeah. [25:45] I mean, we have a very good precedent for this, which is the Starlink satellites. So, [25:50] like in Ukraine for example the military is using them so if Russia [25:55] It's not that Russia... [25:56] hasn't tried or doesn't want to take out starling satellites they definitely do want to it's a lot easier to blow up a data center even if you're russia to blow up a data center in virginia than it is to blow up a data center moving at 27 000 kilometers an hour um in low earth orbit um and so if that were to happen i mean that would be considered an act of war um [26:15] Where the Starlink satellites are flying right now, they're flying much lower than they used to. [26:20] there's no real risk of a Kessler type of like a [26:24] chain effect destroying Lara Philbit

[26:28] So, yeah, I mean, the US, that is the primary function of Space Force is to, they're now building a whole bunch of interceptors and things to deter nations. Secure space. Yeah, exactly. [26:39] And I just have a... [26:40] trouble visualizing how big space is so this may be a gigantically dumb question but as we get to this kind of dyson sphere like there's 100 gigawatts more than that in space yeah is it gets to the point where there's just less light coming through the atmosphere because we have so much up there in leo that's a great question um [26:58] Not the way that we've designed it, which is we're going to fly in this, what they call a dawn-dusk sun-synchronous orbit. And it's actually... [27:05] good for us, it's good for astronomy, it's good for the fact you don't block stuff out. So like, let's say this is the Earth, or let's say like, this is the Sun and this is the Earth. It's not like we're flying around like this, we fly over the poles. And so we never cast a shadow on the Earth. And we also never in Earth's eclipse. [27:22] So we never go... [27:23] behind the shadow of the earth either interesting yeah so and it's great because it means we don't [27:29] We're only visible in the night sky at dawn or dusk. And so we don't then have problems with astronomy and all the rest of it. [27:37] Okay, there's been some, as data centers in space has become almost a mimetic thing, thanks to you, there's also been some fierce criticism of it. What do you think is the chief criticism, you know, what actually resonates with you? [27:50] of the criticism and what would you say is unfounded? - Yeah. [27:55] I think things like... [27:57] The thermal problem is pretty easily solvable. Sometimes people put a cost equation out where they're still using the Falcon 9 launch cost. And I say to people, if you don't think the launch costs are going to come down, then we're a terrible business. If you do, then we may be the biggest business ever.

[28:14] The one that [28:15] not many people talk about, but there's actually probably the most significant is [28:19] we need the chips not to have a higher failure rate in space than on earth because the chips are such an expensive part of what we're doing even if they have like a 10 higher failure rate [28:29] That would basically wipe out all of the savings from the energy. [28:34] Speaking of knowledge, what are the components of the ideal space data center? [28:40] We sort of simplify and just say GPUs in space. GPUs, CPUs, memory, cooling. What all has to go in the box? Yeah. It's much simpler than most satellites. Okay. Because most satellites, for example, the Starlink satellites, a huge portion of the mass and the cost is these phased array antennas. We don't need anything like that. So it's pretty simple. It's... [29:03] solar panels, radiators, [29:06] the box, like the bus [29:08] The chips and the chips obviously then come with memory, motherboard, [29:13] power system [29:14] Although we need very small batteries [29:18] You can't send power directly from the solar panels to the chips, so you need some buffer in there, but we don't need to have 24 hours of battery storage, which you do for most data centers on Earth. [29:27] But that's basically it. One reaction wheel, which is... [29:32] extremely unusual most satellites have at least three reaction wheels they're very heavy because they need to turn the satellites as it [29:38] spins up it needs to turn the satellite we only need one because the satellite's very long and you have this gravity this like natural stabilization from the gravity gradient between the closest point to the earth and the furthest away point to the earth and so you only need to need a reaction wheel in this axis

[29:53] It's not going to move either this way or this way. [29:57] And then two lasers for communication. And so you can strip out a lot of the stuff that goes into land-based data centers then. Yeah, lots of the stuff. I mean, chillers, cooling towers, batteries, backup power, AC to DC converters, devices, [30:10] yeah there's a whole bunch of things we can strip out like that's why so like [30:14] A huge component of the cost saving that most people don't talk about. Most people are talking about the fact, okay, let's say we can do three cents per kilowatt hour on the energy. [30:22] versus 8 cents per kilowatt hour. That's one part of it. The second part of it is [30:26] our, um, [30:28] Infrastructure cost. [30:30] is instead of, you know, you're looking at 15 to $20 million per megawatt for new infrastructure for a data center on Earth. So that's all the things like chillers, cooling towers, batteries backup. [30:39] Um, [30:40] For us, it's only less than $5 million per megawatt. And that's because it's just literally solar panels, radiators. There's like nothing else really. You said $0.03 versus $0.08. Is that roughly where you think the power costs are coming in? Our all-in energy cost in the end state will be much lower than half a cent per kilowatt hour, including the launch cost. Wow. Yeah, the $0.03 is what we've signed for with one of our LOIs. [31:06] - Okay, I see why this is gonna be one of the biggest, big businesses of all time. How are you thinking about sequencing out? Do you have customers already? Do you have contracts lined up? Like, what do you think will be the first workloads that you're running commercially in space? - Yeah, so we've sequenced it where [31:21] You know, there's a bit of uncertainty about the timeline on Starship. And so the first few satellites are designed to provide edge and cloud services for other spacecraft, particularly military and government satellites and Earth observation satellites. And so, yeah, we'll be running workloads for various military customers. We already are actually on StarCloud One. And you can basically keep the business running for as long as it takes to keep until Starship is ready on those types of contracts.

[31:51] for GPU time than a terrestrial contract would be, or if you're competing with terrestrial. So that's this one we're launching later this year. We're launching another one next year, very similar, StarCloud 2 and StarCloud 2.1. And we can basically just keep doing that. Say Starship would delay two years or three years. We can just keep launching these edge nodes for other spacecraft. And then as Starship ramps up, then we'll be launching the StarCloud 3 satellite. And that's the first one, which is cost competitive with terrestrial data centers. Hmm. [32:20] They're your space customers. [32:22] Is there a reason they can't just run their workloads on land-based data centers and beam it up? Yeah. The main reason is we're hugely constrained on the amount of data you can downlink from space to Earth. So, for example, like a SAR satellite synthetic aperture radar, they might be collecting five gigabytes of data a second. [32:41] Then they have to wait for a ground station because they're only transmitting data through this very slow RF at the moment. When they're above a ground station, they might be getting one gigabit a second data rate. Gigabit, not gigabyte. So much slower than the amount of data they're collecting. And so right now they just throw away 90% of the data they collect or it's just not used. [33:00] um [33:01] And so in future, if any satellite that can connect in with an optical terminal to the transport layer, like the SDA Space Development Agency has this transport layer, will be able to connect to us. They can ship enormous amounts of data to us through optical in space, and then we can run inference workloads on that in space. And that might be, for example, identifying a vessel in a normal, you know, they might send us 10 terabytes of data of just ocean.

[33:25] We can then identify the location of a vessel in that. At the moment, they don't have the processing power on board to do that. Interesting. So the initial workloads are likely to be data that is collected in space, processed in space. Yeah, exactly. Yeah, that makes sense. [33:38] Okay, you spent a lot of time in space. [33:41] Aliens. [33:42] great topic i love this i'm so excited let's go are there aliens um there almost certainly has been aliens [33:51] in our galaxy there's almost certainly aliens alive in the universe it doesn't look like there's an intelligent life in our galaxy right now um why do you say there almost certainly has been [34:02] Um... [34:05] Are you familiar with the Fermi paradox? Like this question of why... Go ahead and explain it, though. So the Fermi paradox is the idea... [34:13] It's... [34:14] we should see more life in our galaxy than we do, or we should perhaps see life everywhere in our galaxy. If there had been life anywhere on... There's sort of 400 billion stars in our galaxy, each with 10 planets. So you're talking about 4 trillion planets in our galaxy alone. And there's, by the way, a trillion, trillion galaxies, but just in our galaxy, the Milky Way. [34:35] And each one has been habitable for the last 10 billion years. So we've got 4 trillion planets... [34:41] potentially habitable for the last [34:43] um [34:44] 10 billion years. [34:46] it would seem there's two possibilities. Either we are staggeringly rare, and that is a possibility, [34:53] unbelievably rare. We're literally the first to reach this level of complexity.

[34:58] in our galaxy's history. [35:00] or [35:01] intelligent life is somewhat short-lived now my [35:05] Working hypothesis at the moment is the intelligent life is somewhat short-lived and so yeah They call them the Fermi great filters if we are extremely rare the first the Fermi great filter is probably something like moving from single cellular life to Multicellular life like that is extremely hard for life to do. Let's say If the Fermi great filter is in front of us, which personally I believe it is and [35:27] That means... [35:29] let's say once you hit super intelligence, you know, it wouldn't take very long for a swarm of a million killer AI drones to make mincemeat of both themselves and the planet. And we're building swarms of a million AI killer drones. [35:44] So, [35:44] Like, yeah, to me, it wouldn't be surprising if in the next, you know, few hundred to a thousand years, we do not pass the Great Filter. Maybe it's a little bit doomerism. Like the other alternative is we're literally the first and I'm quite happy to continue living life as if we might be the first. You know, I think we should send probes out to other stars and I think we should... [36:07] expand and explore the galaxy and all the rest of it. [36:10] But in terms of why do I think there's been others, I just think it seems pretty unlikely if on four trillion planets for 10 billion years we're literally the first to have reached this level of complexity. All of them would have probably seen... They would have all understood the Fermi paradox too. They would have all looked around and been like... [36:27] Because it only takes 1 million years or 2 million years to colonize the whole galaxy from the point we're at now. Even with...

[36:35] the Voyager probe technology, you can get to Alpha Centauri in about 50,000 years, which is like the blink of an eye in galactic and evolutionary timescales. So we could send self-replicating probes to every star in the galaxy within about 2 million years. [36:49] We don't see that anywhere any any evidence of Dyson spheres or intelligence in our galaxy at all. Um, [36:55] And so, [36:57] Yeah. [36:58] uh, [36:58] To me, it's pretty likely there's been intelligence in our galaxy and it has not survived very long. What's your opinion? [37:04] Well, I don't know if I have an opinion on that, but I had a question for you as a follow-up, which is – [37:09] Yeah. [37:10] the [37:12] Well, by the way, on that, the other thing that I think is an interesting theory is the, you know, ants by the side of the road hypothesis, which is intelligent life is not short lived. We're just irrelevant to it. I like that, too. But you would see Dyson spheres all across our galaxy. Like it wouldn't be difficult. Like if you're an ant in the middle of Manhattan, you're not like, where are the humans? Like, you know, like the humans are pretty obvious. Yeah. [37:37] The question, though, is you mentioned earlier talking about. [37:41] uh, stick an optimist in a space suit and sending it to moon. And so clearly you've thought about, [37:47] kind of the [37:48] steps to becoming an interplanetary species, you know, starting with the moon and Mars and whatever. How do you see that rolling out? [37:55] um yeah [37:59] I mean, the only thing I have to really go by is the plans that Elon has been putting out. It seems like that's by far the most likely, like the Artemis programs, honestly, seem like a bit of a disaster. But Elon's roadmap is unbelievably, like I think they can actually execute on that. So, yeah. And there's a reason to do it now. Like building mass drivers and shooting AI satellites from the moon is like an extremely strong economic incentive for getting to the moon. And then once we've done that, we'll go to Mars.

[38:29] I think we'll have people on Mars, I think we'll have [38:31] you know cities on the moon in my lifetime hmm [38:34] What do you think of the best business models in space? [38:37] Other than data centers. Definitely data centers are the best one. [38:42] There's a whole bunch. I think asteroid mining will be a huge business at some point. It might take a little while. [38:50] You know... [38:50] Tourism, lunar hotels, lower-forbit hotels will be a big business. Have you reserved one of the slots? From Skylar. GRU. I don't have 200 grand. I think that's how much it costs. [39:03] But no... [39:04] I think it's probably quite way off, and I think SpaceX is probably... [39:08] Very well positioned to do that. [39:09] And Elon even said he was going to enable people to get to the moon. [39:14] Um... [39:15] And then what else? I think manufacturing in space will be a big business. [39:20] There's many more [39:21] communications businesses that will be built. [39:24] Manufacturing what in space? Well, at the moment, companies like Vard are doing crystal structures, particularly for [39:32] medicine and other things, but that's purely because they want to take advantage of the microgravity. I think over time, [39:41] Just because you can get access to more energy in space, you can do lots of things. For example, if you wanted to do refining of... [39:50] material from the lunar surface or from asteroids you you know you can use the energy in space to do that yeah [39:57] Similar to the alien question, do you think...

[40:01] AI is going to help us understand the universe. [40:03] Like the universe conscious, things like that. I hope so. Yeah, yeah. I mean... [40:08] AI will understand the universe a lot better than we do. [40:11] Like... [40:12] What's coming with AI is something that's a trillion, trillion times smaller than all of humanity combined. So it will have a much better grasp on... [40:19] the reality of the universe than we do. And whether it's able to explain that to our dumb human brains is another question. But what are you most excited for it to teach you? [40:30] So, [40:30] I would love to understand more about consciousness. I think that would be the most interesting thing to me, particularly the hard problem of consciousness and why... [40:38] seemingly robotic [40:41] things like humans have qualia, intentionality and [40:45] have sensations and like the [40:49] Yeah, just consciousness in general, I'd be very interested to understand that. [40:53] What about you? Same answer. Oh, yeah? Nice. [40:56] what about you on that one [41:00] How do I maximize multiple money returns? I maximize multiple money returns for limited partners while helping founders build legendary companies from the gate IPM. [41:11] No, I agree. You guys are using AI quite a lot internally, right? We are. So I did this when we went to fundraise. I was like, okay, I'm going to ask. [41:19] Gemini which space data center startup it would invest in if it was like what it'd say star cloud [41:30] maybe it's because it knows that i run stock cloud i don't know maybe it's a bit sick of hunting but i tried it with different windows and like but if i was a vc i would 100 do the same thing like maybe it's more sophisticated than that we're doing everything so for example there's a lot of signal and

[41:46] What's [41:48] kind of infrastructure and tools that the models recommend you to use. And those are going to be. So we're reminding that right now as an example, there's just so many ways to be creative, I think. And like our younger people are probably the most token hungry token consumptive. And they're each kind of figuring out different creative ways to do things. Yeah. I posted on our Slack yesterday, yesterday, [42:09] I try to be like slightly... [42:11] This might sound like a weird way to phrase this, but I posted a monthly reminder that I'm not going to be happy until... [42:20] every engineer is spending $10,000 a month on tokens. Yeah, yeah. And I know they're sitting there going, that surely is not the right metric to track. But I just don't want them to be like, [42:31] I want to really drum it into them. This is literally what I expect and I will be happy when you're spending 10 grand a month on tokens. [42:38] Like sometimes they come to me and say, can we spend 300 bucks a month on Grok4Heavy? It's like... [42:44] Yes. [42:46] In the end state. [42:48] How much of GDP do you think will be spent on inference? [42:51] 99.9% Wow, so as in I think we're building a Dyson sphere and a Dyson sphere will be a [42:57] almost all of the physical economy. [42:59] um, [43:01] So... [43:02] Yeah, you know, in sort of 500 to 1,000 years, um... [43:06] 99.9% of [43:08] the economy will be space compute. [43:11] And almost all of that will be inference. [43:13] Unfortunately, 1,000 years is outside of our investment time frame, but I agree with you. I mean, it depends on what you mean by end state. Yeah. In the next few decades, it's going – have you seen the percentage, the charts of percentage of –

[43:26] Um, [43:27] electricity consumption that goes into compute or anything like this that that graph is not stopping till it gets to 99.9 percent yeah [43:34] Awesome. [43:35] This was so cool. Philip, thank you for joining us today. You live in the future and you brought that future to us, I think, faster than we could have ever hoped. And so thank you for joining us today. This is an awesome conversation. Thank you so much for having me. Thank you. [43:47] Thank you. [44:17] you