Building the First Data Centers in Space

**Philip Johnston** (0:00)
The first thing every space company should do is book the first available launch they can.

**SPEAKER_2** (0:04)
Before they built the thing that they're going to launch.

**Philip Johnston** (0:06)
Before they built the thing, before they probably even know what they're going to launch. Booking a launch is such a good forcing function for a space company. So we founded the company January 1st, 2024
January 2nd, we booked the first available SpaceX rideshare launch. And we were like, okay, something is going to be on that rocket. I'm not sure, 100% sure what it's going to be at this point, but something is going to be on there.

**SPEAKER_3** (0:26)
Sounds like the same advice for all the software companies, we're going to keep launching and launching, same thing.

**SPEAKER_4** (0:38)
Welcome back to another episode of The Light Cone. Today, we're sitting down with Philip Johnston, the co-founder and CEO of Starcloud. Starcloud is building data centers in space to address the energy bottleneck that AI is creating here on Earth. Earlier this year, they raised $170 million led by Benchmark and became the fastest growing unicorn in YC history, just 17 months after Demo Day.
Philip, welcome to The Light Cone.

**Philip Johnston** (1:05)
Thanks so much for having me.

**SPEAKER_4** (1:06)
So to start off, why data centers in space?

**Philip Johnston** (1:09)
So we are very quickly running up on constraints on where we can build new energy projects terrestrially. And so by building them in space, we get access to this almost unlimited low-cost energy in the form of solar.
Of course, there's other costs, like the cost of launch, and the cost of launch is actually very rapidly trending down, with new launch vehicles coming online, the Falcon 9 program and Starship on the horizon. And so that's the reason we're building data centers in space.

**SPEAKER_5** (1:35)
How did you come up with the idea? It's not like the typical idea that people come up with.

**Philip Johnston** (1:43)
I'd actually been working, I was with McKinsey for a few years, working with the space agencies of different governments, and I could see that the launch cost was very rapidly trending down. And actually in early 2023, I decided randomly on a weekend to take a trip down to Starbase, Texas where they're building the Starship launch program even before the first launch. And not many people were paying attention back then. And I could see that they were just building an enormous capacity. So they're building these two Starship gigafactories. They're designed to produce something like three Starships per day. And because Starship is reusable, on a three or four year timeframe, that could lead to us having thousands of times the capacity to get things to space. And so I started thinking, okay, let's just run the clock forward. If the launch cost was 10 times lower than it is today, and the launch capacity was maybe a thousand times more than we have today, what would make sense that currently doesn't make sense?
And so I started thinking about some of the concepts from sci-fi that I remember as a kid, like space-based solar, where you have these huge solar panels in space, you beam that power down.
And essentially, I just reached out to a few folks I knew in the space industry and got connected with a few others and started ideating on, okay, what would make sense if the launch cost was much lower than it is today?

**SPEAKER_2** (2:53)
I'm curious, are there any other ideas that occurred to you during this process when you were thinking of what people could build in space?

**Philip Johnston** (3:01)
And how much it's cheap? Yeah, tons. I mean, we definitely looked at manufacturing in space, and there's Varda. We looked at asteroid mining. And obviously, YC has Astroforge.
We looked at space hotels. We looked at basically anything which could make sense if the launch cost was a lot lower than it is today.

**SPEAKER_2** (3:17)
And how come data centers was the best choice?

**Philip Johnston** (3:20)
Data centers makes a lot of sense to be the first thing you do because you don't need to re-enter a product. So with things like asteroid mining or with manufacturing in space or space hotels, they require this very expensive re-entry process. Initially, what we actually started doing was space-based solar. So huge solar panels, and then you beam that power down, and it's a concept from, I think, the 60s, even Asimov in the 40s was writing about it.
The problem with space-based solar is you actually lose 95 percent of the energy in transmission from space to Earth. So for the first two months of the company, that was literally what we were doing. We were called Lumen Orbit because of that reason, the luminosity in orbit. We were thinking, once we get that power down, what are we going to be using it for? Even back in 23, most new energy projects were being built for data centers. So we were like, okay, well, either directly or indirectly, this power is going to go into data centers. Let's rerun those numbers. So initially, we'd run the numbers to know what's the launch cost break even that makes sense for space-based solar? And we'd come to a number of like $50 a kilo. So then we rerun the calculations. We were like, okay, let's spend a month figuring out what would the launch cost break even need to be to make data centers in space break even? And we came to a much closer to reality number of $500 a kilo. And that's what we think currently that the break even launch cost is.