My draft blog post about all the things that are up with space data centres keeps getting bigger and bigger.
"The other half of the MS model is data centres. “Orbital compute deployments” start in 2028, reach cost parity with their earthbound equivalents by 2031, and put 364GW of rigs in space by 2040."
With 25% efficient cells, at 500 km altitude, in a terminator-tracing SSO, this is enough to occupy a *contiguous* ring roughly 25 m tall, all the way around that orbit.
Also, from other statements they're clearly copying Alphabet's study which said cost parity in 2035, if they can actually launch 370,000 tons and maintain their learning rate.
"A $668bn funding obligation to 2034 that delivers free cash flow that year of negative $48bn sounds less than ideal, though FCF might flip positive to $138bn in 2035 if everything goes to plan, so that’s nice. The SpaceX CEO presumably has a long history of delivering products on time and to the required specification that can support such confidence."
I love the snark here.
"Helium-3 is one of the clearest examples of why lunar infrastructure could matter. The isotope is extremely rare on Earth, with current supply largely tied to tritium decay, but the Moon has accumulated helium-3 for billions of years because it lacks Earth’s atmosphere and magnetic field. NASA mining concepts often assume concentrations around 20 parts per billion, meaning helium-3 is abundant in total but painfully diffuse, requiring hundreds of tons of regolith to be mined and heated to recover small quantities."
Ugh. This will need a separate blog post for why it's stupid. At 20 ppb, even if we could fuse He3, that makes lunar regolith marginally less energy dense than firewood. Also, anyone with a fusion reactor can make He3, even highschool students with home-made fusors can already do this. I'll have to check sources and maths to make sure I've not missed something important about which would be cheaper, *currently existing* neutron sources like fusors or going to the moon, but regardless, we can't currently use this stuff for fusion and the moment we can we won't need to mine it.
(I have not yet formed an opinion about non-fusion uses for He3).
While I'd suspect the design is still in flux, the current design is for a 120kw satellite with 110 square meters of radiators. Scaling to hundreds of gigawatts is intended to be by repeatedly launching smaller designs.
I view articles like that as a kind of roleplaying, essentially. The authors are pretending to be space hardware engineers, but the results are not remotely realistic.
> I sat out the TMT bubble until they quit using the term "information superhighway," and it saved me an 80% drawdown.
> I'm sitting out the AI / chip / SpaceX [AICSX, pronounced like the wrestling shoes?] bubble until they stop using the word "compute" as if it were a noun.
> I'm guessing I'll save myself a drawdown on a similar scale.
> until they stop using the word "compute" as if it were a noun.
That’s a bit silly, since it is a noun at this point, meaning computing resources or computing capacity.
It’s nowhere near being a term similar to “information superhighway”, which was never a technical term used within the industry, it was purely used in communication mostly to the public or in government agency and contractor slide decks.
In finance and so the world we live in, the value of an equity is less related to the merit of the product than the firm's capacity to generate future free cash flow. Software companies, B2B SaaS in particular, have been basically unbeatable in this regard, hence the state of the market (and our salaries) for the past few decades. Industrial firms have to use metrics like "EBITDA" to show how much cash they'd have to potentially pay to investors if they didn't have to pay so much in interest on their debt, taxes, and fixing up decaying equipment...
"Morgan Stanley’s sum-of-the-parts analysis tells a more nuanced story. The “Space” segment, which encompasses Falcon rockets, Dragon capsules, and the Starship program, has been bleeding money. Heavy investment in Starship development drove operating losses in that division, even as SpaceX overall reported a profit of around $8 billion on revenues between $15 and $16 billion in 2025"
Why is it going to be huge? Who are the customers and what do they want?
I don't follow this closely, just look at the pretty pictures. If there's demand for lifting much bigger/heavier things to orbit than presently possible, I would probably not know, for lack of pretty pictures. So please tell.
Don't repeat mistakes of people that were making fun of SpaceX landing rockets before they started to land.
Starship has so much innovation in there, the raptors itself etc.
It launches, it flies, it re-enters and it lands. The engines work. The heat protection work. Even when they push it to the limits by intentionally experimenting with different heat protection, omitting tiles etc. Even when they are in R&D stage.
I believe they can make it work with little refurbishment between flights. Even if all didn't work like they planned, they still have a very, very good vehicle.
I mean something must go off the rails very very badly for the Starship NOT to enter the service.
They're treating lift as a cost centre for the $128/share connectivity segment. (X and Grok being worth $12/share is debatable. Enterprise AI being worth $150+ speaks for itself as nonsense.)
"Starting with the reusable rockets, MS expects SpaceX to eat itself. Launch costs will collapse by more than 99 per cent versus their historical average within 10 years, it says. Operating margin on launches will have jumped to about 40 per cent, from around negative 50 per cent currently, but 40 per cent of less than 1 per cent still isn’t very much."
Though as someone (probably JumpCrisscross, can't remember) pointed out a previous time this came up, as SpaceX is selling launch to Starlink, and also own Starlink, which one of the two gets to count as making a profit or a loss is just a matter of preference.
This is my industry I know it well, apparently much better than these bozos. SpaceX launch is only “unprofitable” only in the accounting sense because they reinvest their profits into Starship. Their actual profit margin for launch of F9 is 62% - 80% depending on configuration. That is a margin unheard of in aerospace.
There is literally no competition worth speaking of, and nobody to provide downward price pressure. SpaceX started moving into their own constellations because lower prices open up new markets, and this lets them access those markets without having to lower launch prices.
And if you think, as Morgan Stanley seems to, that the only money to be made in space is selling launch of earth orbiting satellites, you’re going to miss out on the boom that is going to make the first quadrillionaire.
> And if you think, as Morgan Stanley seems to, that the only money to be made in space is selling launch of earth orbiting satellites, you’re going to miss out on the boom that is going to make the first quadrillionaire.
I was with you up to this point.
Quadrillionaire? Seriously? On species-wide economy of 0.1Q/year? On a timescale short enough that SpaceX remains a coherent entity and you don't have to account for things like the sum-total risk of nuclear war? Or even just of Musk dying of old age given he's 55?
> SpaceX started moving into their own constellations because lower prices open up new markets, and this lets them access those markets without having to lower launch prices
the alternate take here is that even at current prices, falcon 9 is more than capable of completely filling space demand which makes building a >10x bigger vehicle seem kind of dumb
I think the main idea for starship is fully reusable ( which falcon 9 isn’t) and much larger capacity (both volume and mass). Driving down the cost of getting mass to orbit.
I googled and got the following costs per kg to orbit
Falcon approx $3000 / kg
Starship (early) $600 / kg
Starship (target) $ 100 / kg
If they can achieve the target, it’s transformative. The Chinese will follow the lead and be available for some commercial customers but the majority of the market will be SpaceX.
How far ahead is SpaceX compared to the competition, a decade? More? Less? Is the gap closing or growing?
> Their actual profit margin for launch of F9 is 62% - 80% depending on configuration. That is a margin unheard of in aerospace.
Do you expect they maintain these margins on launch and whatever services they deliver from space as that gap is closing? Is their first mover advantage practically unassailable because it's in space? Tesla built the EV market and are having their lunch eaten by the competition.
Space is cool to nerds like me, but what do I really need from it? I've got all the navigation satellites I could want (which I don't pay for) and the best satellite imagery I use is still hyperspectral airborne imagery.
Now, of course that's not the full story but the use cases get rather specific beyond that: the launch market just isn't actually very big (afaik $30 billion a year).
Without doing a google search - optical fibers factories and pharma factories can deliver higher quality products when built in space. And I bet there are hundreds of other examples.
Just because launch costs were high and these weren't viable before, doesn't mean they won't be viable now.
> optical fibers factories and pharma factories can deliver higher quality products when built in space
Those seem like classic examples of what you get when you have a solution in search of problems.
What’s the monetary value of the incremental improvements in those products, and how does it compare to the cost of setting up and operating manufacturing facilities in orbit?
> In our model, we estimate SpaceX raising an average of $72bn annually between 2027 and 2030 and then an average of $95bn annually between 2031 and 2034
Ah. There it is. Even if that's all done as investment-grade debt (with a 50 bp underwriting spread), that's $3+ billion of banking fees.
My draft blog post about all the things that are up with space data centres keeps getting bigger and bigger.
With 25% efficient cells, at 500 km altitude, in a terminator-tracing SSO, this is enough to occupy a *contiguous* ring roughly 25 m tall, all the way around that orbit.Also, from other statements they're clearly copying Alphabet's study which said cost parity in 2035, if they can actually launch 370,000 tons and maintain their learning rate.
https://arxiv.org/pdf/2511.19468
I love the snark here. Ugh. This will need a separate blog post for why it's stupid. At 20 ppb, even if we could fuse He3, that makes lunar regolith marginally less energy dense than firewood. Also, anyone with a fusion reactor can make He3, even highschool students with home-made fusors can already do this. I'll have to check sources and maths to make sure I've not missed something important about which would be cheaper, *currently existing* neutron sources like fusors or going to the moon, but regardless, we can't currently use this stuff for fusion and the moment we can we won't need to mine it.(I have not yet formed an opinion about non-fusion uses for He3).
I just skimmed that linked paper. Only mention I found of cooling is:
> Cooling would be achieved through a thermal sys- tem of heat pipes and radiators while operating at nominal temperatures.
Isn't that drastically underselling potentially one of the harder parts of this whole endeavor?
Very drastically, the ISS solar panels can generate up to 120kW of power, look at the size of its radiators needed to cool it down.
Scaling that to the hundreds of GW range is quite laughable.
https://x.com/SawyerMerritt/status/2064108916611420273?lang=...
While I'd suspect the design is still in flux, the current design is for a 120kw satellite with 110 square meters of radiators. Scaling to hundreds of gigawatts is intended to be by repeatedly launching smaller designs.
I view articles like that as a kind of roleplaying, essentially. The authors are pretending to be space hardware engineers, but the results are not remotely realistic.
I'm also writing a blogpost on orbital datacentres, maybe we should compare notes!
Dotnetrocks did an excellent breakdown https://www.dotnetrocks.com/details/2007
He3 is needed as a cryogenic for quantum systems, not fusion fuel.
Not a coincidence that both technologies aren’t going to live up to the proponents’ claims, and both want materials we don’t really have.
As I understand it, He3 is also used in nuclear materials detectors.
Morgan Stanley list both.
Panhandler
> I sat out the TMT bubble until they quit using the term "information superhighway," and it saved me an 80% drawdown.
> I'm sitting out the AI / chip / SpaceX [AICSX, pronounced like the wrestling shoes?] bubble until they stop using the word "compute" as if it were a noun.
> I'm guessing I'll save myself a drawdown on a similar scale.
A comment under the original article.
> until they stop using the word "compute" as if it were a noun.
That’s a bit silly, since it is a noun at this point, meaning computing resources or computing capacity.
It’s nowhere near being a term similar to “information superhighway”, which was never a technical term used within the industry, it was purely used in communication mostly to the public or in government agency and contractor slide decks.
That feels…low. They’re the only one with significant proven and operational space lift capacity
In finance and so the world we live in, the value of an equity is less related to the merit of the product than the firm's capacity to generate future free cash flow. Software companies, B2B SaaS in particular, have been basically unbeatable in this regard, hence the state of the market (and our salaries) for the past few decades. Industrial firms have to use metrics like "EBITDA" to show how much cash they'd have to potentially pay to investors if they didn't have to pay so much in interest on their debt, taxes, and fixing up decaying equipment...
Citation:
"Morgan Stanley’s sum-of-the-parts analysis tells a more nuanced story. The “Space” segment, which encompasses Falcon rockets, Dragon capsules, and the Starship program, has been bleeding money. Heavy investment in Starship development drove operating losses in that division, even as SpaceX overall reported a profit of around $8 billion on revenues between $15 and $16 billion in 2025"
Starship is going to be huge when it's finally operational. It seems like it should be worth more than $8/shr if the potential is accounted properly.
Why is it going to be huge? Who are the customers and what do they want?
I don't follow this closely, just look at the pretty pictures. If there's demand for lifting much bigger/heavier things to orbit than presently possible, I would probably not know, for lack of pretty pictures. So please tell.
Don’t forget that SpaceX has 3.884 billion outstanding shares!
just like full self driving tm
> Starship is going to be huge when it's finally operational.
Any day now. Yep, real soon, honest!
Don't repeat mistakes of people that were making fun of SpaceX landing rockets before they started to land.
Starship has so much innovation in there, the raptors itself etc.
It launches, it flies, it re-enters and it lands. The engines work. The heat protection work. Even when they push it to the limits by intentionally experimenting with different heat protection, omitting tiles etc. Even when they are in R&D stage.
I believe they can make it work with little refurbishment between flights. Even if all didn't work like they planned, they still have a very, very good vehicle.
I mean something must go off the rails very very badly for the Starship NOT to enter the service.
It has to make money. The Space Shuttle was a technical marvel as well and was massively subsidized by the US taxpayer.
I'm thinking of flying over on the Spruce Goose to watch the first operational launch.
They're treating lift as a cost centre for the $128/share connectivity segment. (X and Grok being worth $12/share is debatable. Enterprise AI being worth $150+ speaks for itself as nonsense.)
Space lift is not very profitable. The money comes from whatever you actually put in orbit with that lift capacity.
SpaceX’s launch services have huge margins.
Huge negative margins, according to the article:
Though as someone (probably JumpCrisscross, can't remember) pointed out a previous time this came up, as SpaceX is selling launch to Starlink, and also own Starlink, which one of the two gets to count as making a profit or a loss is just a matter of preference.This is my industry I know it well, apparently much better than these bozos. SpaceX launch is only “unprofitable” only in the accounting sense because they reinvest their profits into Starship. Their actual profit margin for launch of F9 is 62% - 80% depending on configuration. That is a margin unheard of in aerospace.
There is literally no competition worth speaking of, and nobody to provide downward price pressure. SpaceX started moving into their own constellations because lower prices open up new markets, and this lets them access those markets without having to lower launch prices.
And if you think, as Morgan Stanley seems to, that the only money to be made in space is selling launch of earth orbiting satellites, you’re going to miss out on the boom that is going to make the first quadrillionaire.
China and other competitors have other ideas, even if you're not aware of them.
When your whole pitch is that you're commoditising a technology, don't be surprised when you get a commoditised market.
Their lead is insurmountable, might bleed 1/2% to china but they own launch market and will do for the next century.
You’re claiming in 10 years they made something others won’t for another century? This has no historical precedent.
China is going to eat them, just like they ate Teslas insurmountable lead in a few short years.
> And if you think, as Morgan Stanley seems to, that the only money to be made in space is selling launch of earth orbiting satellites, you’re going to miss out on the boom that is going to make the first quadrillionaire.
I was with you up to this point.
Quadrillionaire? Seriously? On species-wide economy of 0.1Q/year? On a timescale short enough that SpaceX remains a coherent entity and you don't have to account for things like the sum-total risk of nuclear war? Or even just of Musk dying of old age given he's 55?
In which currency? 1 billion Rupiah is less than 60,000 usd ;)
A quadrillionaire would only need $60 billion or so.
Can’t rule out hyperinflation doing some heavy lifting :)
> SpaceX started moving into their own constellations because lower prices open up new markets, and this lets them access those markets without having to lower launch prices
the alternate take here is that even at current prices, falcon 9 is more than capable of completely filling space demand which makes building a >10x bigger vehicle seem kind of dumb
I think the main idea for starship is fully reusable ( which falcon 9 isn’t) and much larger capacity (both volume and mass). Driving down the cost of getting mass to orbit.
I googled and got the following costs per kg to orbit Falcon approx $3000 / kg Starship (early) $600 / kg Starship (target) $ 100 / kg
If they can achieve the target, it’s transformative. The Chinese will follow the lead and be available for some commercial customers but the majority of the market will be SpaceX.
> This is my industry I know it well
How far ahead is SpaceX compared to the competition, a decade? More? Less? Is the gap closing or growing?
> Their actual profit margin for launch of F9 is 62% - 80% depending on configuration. That is a margin unheard of in aerospace.
Do you expect they maintain these margins on launch and whatever services they deliver from space as that gap is closing? Is their first mover advantage practically unassailable because it's in space? Tesla built the EV market and are having their lunch eaten by the competition.
There just isn't that much demand for space.
Space is cool to nerds like me, but what do I really need from it? I've got all the navigation satellites I could want (which I don't pay for) and the best satellite imagery I use is still hyperspectral airborne imagery.
Now, of course that's not the full story but the use cases get rather specific beyond that: the launch market just isn't actually very big (afaik $30 billion a year).
Without doing a google search - optical fibers factories and pharma factories can deliver higher quality products when built in space. And I bet there are hundreds of other examples.
Just because launch costs were high and these weren't viable before, doesn't mean they won't be viable now.
> optical fibers factories and pharma factories can deliver higher quality products when built in space
Those seem like classic examples of what you get when you have a solution in search of problems.
What’s the monetary value of the incremental improvements in those products, and how does it compare to the cost of setting up and operating manufacturing facilities in orbit?
This feels like the “there’s a global market for maybe 4 computers” of the 21st century.
This feels like the “we should make an internet company that ships pet food to anyone, anywhere!” of the 21st century.
I really wish I could buy the SpaceX part of SpaceX decoupled from all the AI hopium.
You might enjoy Rocket Lab $RKLB, pure space tech without the AI distraction.
> In our model, we estimate SpaceX raising an average of $72bn annually between 2027 and 2030 and then an average of $95bn annually between 2031 and 2034
Ah. There it is. Even if that's all done as investment-grade debt (with a 50 bp underwriting spread), that's $3+ billion of banking fees.