Think Win Win

Why the SpaceX Business Case does not Work I have previously expressed concerns that Starlink would not be available globally and that its operations would likely remain severely restricted due to geopolitical dependencies. It won’t be a complete non-starter or physically impossible, but it will fall far short of the scale projected by SpaceX. Let’s turn now to the area from which SpaceX expects to generate the most revenue and profit: data centers in orbit. I once considered this a plausible concept, but in light of new insights, I have come to the conclusion that it will not work. Allow me to explain why: Elon claims that cooling is, quote “actually much easier in space than on Earth” but that is simply incorrect for physical and first principle reasons. First of all Orbit is actually not cool but if exposed to a sun it is hot, because there are no particles present, this cannot be measured in the conventional way. Its a vacuum which complicates everything. The only way to cool data centers in space is through thermal radiation because you can't cool with air or water. The equipment required for this, solar arrays and cooling radiators, is so massive that even if the “Starship” were able to transport it into orbit at a fraction of today’s costs, the total expense would still far exceed that of a data center on Earth. Furthermore, it is a highly complex system: should a malfunction occur and it will many times without any doubt, the entire project would be a total loss increasing the costs even further. While it is certainly possible to build it—and perhaps even get it up and running—what is the point if the cost per unit of computation (token) is far higher than it is on Earth? And why would any company pay for it when there are viable alternatives available on Earth? Granted, one could imagine scenarios where this might be justifiable, for instance, if all options on Earth had been exhausted, but let’s be realistic: we are still decades away from that. And even then, the fact remains: if the computing costs are too high, customers simply won’t pay for it. When you consider all these challenges facing SpaceX—not to mention the fact that Europe and Asia are looking to develop their own launch systems, and that a base on the Moon or even Mars is, by definition, not a profitable endeavor—one has to wonder whether SpaceX is currently valued appropriately. In my view, the company is significantly overvalued, as I fail to see where the profits are supposed to come from. For those who would like to learn more about some of the challenges associated with data centers in space, I recommend taking the time to watch this video. youtube.com/watch?v=S1umCJfb…