Issue #18 — Starcloud

Alright — anyone watch Avatar: The Last Airbender as a kid? Because we've been accidentally training like Aang in this newsletter.

Have I lost my marbles? Not yet. Let me explain.

The last couple months, we've talked a lot about data centers. And to be fair, they're the talk of the town. AI is hungry, the buildings that feed it are everywhere, and the smartest people alive are scrambling for power sources and to cool the things without melting the planet.

And without realizing it, we've been working through the four elements solving it. We're heating rocks in a box — Exowatt. Earth. We're sinking data centers to the floor of the Pacific to let the ocean handle the cooling — Subsea Cloud. Water. And we're strapping a nuclear reactor to a truck bed and driving it past the grid — Radiant. Fire (or close enough).

Three elements down. This week, we're learning about the last one. Air… or lack thereof.

Meet Starcloud — whose answer to "where do we put the data center" is, basically: not here. Not on this planet. Buckle in, folks. We're going to space.

Data centers are needy things. Strip away the jargon, and it wants exactly two things: a boatload of power, and a way to stay cool. Down here on Earth, both are getting harder to find. Up in orbit, both are basically lying around for free.

Let’s start with power. On Earth, solar only works when the sun's up — clouds, weather, and the sun setting every day disrupt the whole thing. In orbit? None of that exists. No clouds. No weather. No night. Solar panels up there can sit in direct sunlight 24 hours a day, 365 days a year. It is, and I cannot stress this enough…

Now cooling. In space, you can't cool a chip the normal way — no air to blow over it, no water to pump through it. But as we all learned in 5th-grade science, space is already cold. Colder than a pitcher of Lost Coast Tangerine Wheat on a November afternoon in the mountains. Jack, Tommy, Mason — I still think about that pitcher 6 years later. I digress. So you don't add cooling up there. You just let the heat leak out of the chip into all that empty, freezing nothing. Hot stuff sheds heat, and space is the biggest, coldest heat sink there is. Starcloud's whole engineering flex is a giant metal radiator fin that dumps that heat overboard — the largest one ever flown.

That's the whole pitch. Free power, free cooling, no permits, no water bill, no protesters. Two problems strangling the AI industry on Earth, both solved by the simple act of leaving.

Two fair questions. Let's take both.

First: who actually cares? The AI industry is in a knife fight for electricity right now. A Tom and Jerry standoff, if you will. As we know from Issue #16, the wait just to plug a new data center into the U.S. grid has blown past five years in some regions, creeping into the 2030s. Power prices have skyrocketed, and cooling them guzzles staggering amounts of water. Not to mention Americans across the entire political spectrum have decided they hate data centers and don't want one anywhere near them. "Just build it somewhere else" is running out of somewhere. But what about orbit?

It also doesn't have nighttime. Remember how a solar panel on Earth only works about a quarter of the time? In orbit it's closer to all the time — the same panel cranks out roughly 5x the energy. So you're not just dodging the grid line. You're getting a better power source once you're up there.

And this isn't a science-fair poster. Crusoe’s a paying customer, and Amazon, Google, and Nvidia are all partners flying on Starcloud’s next satellite. Actual customers. Actual money.

Second question: if the computer's in space, how do you actually use it? You're on your couch. And the GPU is hurtling through space at 17,000 miles an hour. What gives?

Easy: the computer never comes down. Only the answers do. You send your AI job up to the satellite over the internet, the chip does the heavy thinking in orbit, and the results get beamed back to Earth on a laser. That's it. Same as renting a cloud server today.

Co-founder Philip Johnston has a pretty normal resume — if your version of normal includes grad degrees from Harvard and Wharton, a master’s in applied math, and a McKinsey stint building satellites for national space agencies. A normal amount of qualified to start a space company, give or take.

But why data centers in space? From what we've gathered, the conviction crystallized in 2023, when he toured SpaceX's Starbase in Texas right before a launch. He ran the math: if getting to orbit keeps getting this cheap, then building a data center up there — free sun, free cooling, no permits — eventually beats building one down here. So, as one does, you build a company.

And he's not shy about how big he thinks this gets. Johnston's bet, which he'll repeat to anyone with a microphone, is that within about ten years most new data centers won't be built on Earth at all. They'll be built in orbit. He throws around numbers like a trillion dollars a year eventually flowing into space-based compute. That's hard to even conceptualize. Is it possible? Heck if I know. But the guy already put a working GPU in orbit on his first try — so maybe hold the skepticism and hear him out.

Their first satellite, Starcloud-1, went up in November 2025 — a mini-fridge-sized box with a single top-shelf Nvidia chip inside, built and launched on just a few million in 21 months. It became the first computer to ever train an AI model in space.

Starcloud-2 is set to fly on a Falcon 9 and be fully operational in 2027. And it's a beast by comparison: 100x the power, Nvidia's Blackwell AI chip, and an Amazon server blade flying in orbit. This one runs paying customers.

Then it gets absurd. Starcloud-3 is a three-ton spacecraft built to deploy out of SpaceX's Starship like a Pez dispenser firing out candy. And the long game, already filed with the FCC? A constellation of up to 88,000 satellites. Eighty-eight thousand flying data centers. You absolutely need to click the links above and watch their promo videos — it's the beginning of a 4-hour rabbit hole you're about to go down.

Ok, let’s pump the brakes.

Getting to orbit isn't the problem — Starcloud-1 and -2 ride up on SpaceX's Falcon 9, which has flown commercially for years. Cost is the problem. To actually undercut a data center on Earth, Starcloud needs the next generation of bigger, cheaper SpaceX rockets flying often — and those aren't running commercially yet. Johnston doesn't expect that until 2028 or 2029, and plenty of sharp people bet the economics don't close until the 2030s. So they can launch today. They just can't win until the rockets catch up.

And the competition is flat-out terrifying. SpaceX has filed to launch up to a million of its own data-center satellites. Google's chasing the same idea. So is Blue Origin. Starcloud is a startup trying to outrun the largest space company on Earth — the same one they're buying rides from.

But Starcloud is first. They've got the only data-center-grade chip that's actually powered on and done real work in orbit, plus a pile of hard-won data about what breaks up there that money can't buy. Being early and scrappy is how the little guy occasionally takes down the giant. For now, first place is theirs to lose.

Think about what actually happens when you ask ChatGPT something. Right now, that question runs through a building in Virginia — or North Carolina, or damn near any state now — chugging power and water to keep a room of chips from overheating.

Starcloud's bet is that in ten years, it doesn't. You hit enter, and your question flies up to a computer in orbit, running on sunlight, cooled by the empty cold of space, beaming the answer back before you've put your phone down. You'd never know. It'd just feel like the internet.

The "cloud" stops being a metaphor I never understood and becomes the actual location. And the most power-hungry thing we've ever built moves off the planet that couldn't house it.

Starcloud is hiring out of Redmond, Washington — thermal engineers, GPU and hardware people, and software folks. Their career page says it best: "Join our team, push the boundaries of the space economy, and be part of this pioneering effort to redefine the future of energy."

There's not another career page on Earth, or off it, that can say that.

Open roles → starcloud.com/careers

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