There are major roadblocks for tech CEOs’ obsession: Data centers in space

Data centers. In space. It’s the hottest topic among CEOs with skin in the data center or rocket-launching business, with Tesla (and SpaceX) CEO Elon Musk and Jeff Bezos, former Amazon CEO and founder of Blue Origin, purportedly engaged in this race to make one small step for man and a giant leap for AI-kind. OpenAI CEO Sam Altman reportedly wants in, too.

It’s also incredibly silly given the current (and foreseeable future) state of the tech, if you ask Deutsche Bank analyst Edison Yu.

Rocket launches cost too much. Yu cited estimates from Google indicating that launch costs would need to be below $200 per kilogram (or about $441 per pound, for heathens) to be viable, and pins current costs at about $1,500 per kilogram. Costs need to go down by, oh, around 87%.

Space is cold but bad at cooling. “To properly cool a large AI cluster, a data center satellite would require massive passive radiator panels,” per Yu. As author Zach Weinersmith wrote, “Cooling is not better in space. It is far, FAR worse, necessitating objects vastly larger than anything we’ve built in space simply to cool off small datacenters.”

Space makes Michael Burry more right about depreciation. Remember his argument that companies were understating GPU depreciation costs? Well, this critique about chips having a shorter useful lifespan becomes a lot more salient in space thanks to radiation.

Fixing stuff in space is hard. Fixing stuff on Earth is hard! Satellites would need better hardware to increase the likelihood that nothing goes wrong, and that would drive up the cost of production.

In short, it can’t be better to have them in space. Most of the problems that are solved by space — ambient cool temperatures, cheaper to build, ample energy resources — can be far better solved by, say, just going to Canada or something.

The Takeaway

Now, tech CEOs don’t just wax eloquent about stuff that’s straight out of science fiction for the mystique (though that’s probably a part of it). Pursuits that seem so futuristic that they border on the absurd on first hearing are massive potential moneymaking opportunities. (If there’s a flying autonomous car available in my lifetime, shut up and take my money!)

The good news? This flight beyond Earth’s atmosphere is not a flight of fancy, according to Deutsche Bank. “There are clearly technical challenges to making this a viable endeavor but these seem to be engineering constraints as opposed to physics,” Yu wrote.