Economics of Orbital vs. Terrestrial Data Centers
4 days ago
- #orbital-data-centers
- #economics
- #space-compute
- The article questions the rationale behind orbital data centers, emphasizing the need for a clear economic advantage over terrestrial alternatives.
- It critiques the current discourse for lacking rigorous analysis and relying on aesthetic futurism rather than grounded value propositions.
- The author presents a first-principles model comparing orbital solar data centers to terrestrial ones, focusing on cost per watt of usable power for compute.
- Key assumptions include global target capacity, analysis period, and exclusion of financing, taxes, and incentives.
- Orbital solar assumptions involve Starlink-class satellites, solar cell degradation, and thermal management without dedicated radiators.
- Terrestrial assumptions include on-site combined cycle gas turbines (CCGT), fixed PUE, and no efficiency gains over time.
- The core thesis is whether space-based compute can be cost-competitive with terrestrial alternatives, not just cool or futuristic.
- Findings suggest orbital data centers are not obviously stupid but face brutal economics, requiring aggressive assumptions to be viable.
- Vertical integration is crucial due to margin stacks and mass taxes, with SpaceX being a potential candidate to brute-force the industrial stack.
- The article advocates for irrational, high-variance projects that advance civilization, criticizing wasteful spending on status symbols.
- Technical challenges include thermodynamics in space, where heat rejection relies solely on radiation, imposing strict temperature limits.
- The governing constraint is maintaining equilibrium temperature below silicon processor limits, requiring careful radiator sizing.
- Energy balance involves managing solar flux, electrical conversion, and thermal absorption, with radiators rejecting 100% of absorbed solar flux.
- Operating temperature limits for AI accelerators (85–100°C) dictate radiator surface temperature constraints (~75°C).
- The article concludes by urging rigorous, first-principles analysis to move the conversation from vibes to reality.