r/stocks
SpaceX. The math is, in fact, mathing
Calculates Capex for 1GW AI compute on Earth vs SpaceX satellite AI, concluding the satellite approach is highly viable and competitive.
- Satellite AI deployment for 1GW compute is mathematically viable with current tech, costing $12B-$34.5B compared to $20B-$30B for terrestrial.
- If Starship achieves reusable costs near Elon's estimates, satellite deployment becomes extremely cost-competitive.
- Space heat radiation concerns are debunked as misinformation; radiator surface area is manageable compared to solar panels.
The SpaceX IPO and all the emotion about Elon is making people argue so much out of emotions and hunches, so here is some figures of you to evaluate yourself
This is all for 1 gigawatt of AI compute
1) Cost of terrestrial AI deployment(excluding the chips)
Facility construction: $15b
Facility hardware(electric, cooling, HVAC, racks, etc): $2b
Power generation (onsite-owned): $3-10b
Total upfront cost (excluding chips): $20-$30 billion.
2) cost of Satellite AI (Using AI-1 satellite specs as announced recently):
Satellite weight: 2 tons
Compute capacity:120-150kw
Number of satellites required for 1 GW: 9000 (rounded up to account for lost satellites)
Starship capacity: 100-150 tons (50-75 satellites)
Falcon heavy capacity: 62 tons (30 satellites)
Satellite cost(excluding chips again) : current starlink mini is $200k, V3 is estimated at $1 million (including all the antennae) so I will go with $500k
Launch cost (current, not future):
Falcon heavy: $100mil/launch commercial pricing for 3rd parties.
Starship: $90 mil estimated internal cost
Starship (future resuable) Elon says $10m so I will go with $50m
Cost of launch 9000 satellites:
Falcon heavy commercial: 300 launches X $100 mil = $30 billion
Starship current cost (at 60 satellites a pop): 150 launches X $90 mil = $13 billion
Starship future = $7.5 billion
Cost of satellites (excluding chips): $4.5 billion
Total cost of deployment sats+launch for 1 GW of compute: $12-$34.5 billion
TLDR: the AI satellite business is viable using current technologies and extremely competitive if starship works out at even 5X the cost Elon estimates
PS: no, heat radiation in space is not an issue at all, that is just straight misinformation spread online by people who just want to dunk on Elon. The radiator surface would be less than the required solar panel surface, look it up
heat radiation in space is not an issue at all, that is just straight misinformation spread online
Ah yeah it's definitely NOT been a challenge for the entirety of space flight. This is also why the ISS has a tiny little radiator... oh wait.
Someone is spreading misinformation for sure... look inward
Ah yes if only we can print laws of physics like we print money.
Also it is not even the only problem. Ionizing radiation is a bitch as well. You need triple redundancy for computing in space and propably run older designs with larger transistors cause it takes more energy to flip zeros.
Call me old school, but how am I supposed to make a good investment decision when I don't even know if the ROI for regular data centers is positive, let alone the ROI for 1 GW of AI compute in space? The math isn't mathing because nobody has any clue if profitability comes with a postive or a negative sign.
Lol this is so dumb. Now explain how you solve the heat dispersion in a vacuum problem.
What about operating costs, asset lifetimes, financing costs, maintenance, oh and another tiny detail: REVENUE?
How about doing some actual math.
You don't understand... if the laws of thermodynamics have no bearing on valuation, why should revenue? (/s)
Thanks your napkin Ted talk now finally justifies the valuation.
Is the 28t dollar addressable market in a room with you too?
His is like really important. It’d solve sooooo many space flight issues if Heat just went away from hot stuff.
We do, but they aren't normal commercial units. Mr. Musk ought to know this as well, given that he does run a satelite company.
If AI was profitable, we'd know because the AI companies would be raising a lot less money because their customers would be showering them with money.
Its not, this is stupid, launching it into space is even dumber than burning all this energy on the ground. Its so easy to show the ROI and anyone refusing to should make you suspicious.
And no, there is no tech analogue that burned anywhere near to this amount of capital in the build out phase. You could build a nationwide high speed rail system for this kind of spend and probably have money left over to do another mega-project.
I don't think people have all yet appreciated the insane money invested so far WITHOUT any finished mega data-center.
Data centers require constant maintenance. If any of the satellites malfunction, the downtime will be very long and the repair costs will go through the roof because you have to send someone up there in a spaceship. Unless your idea is to simply abandon these satellites when they break.
Not to mention, these satellites will need to be upgraded with new hardware every few years or so. This is much easier to do on the ground than in space.
Your theory works if we just ignore all the essential parameters of a business like earnings, depreciation and maintenance costs, return on capital employed and most importantly: profitability.
This entire "data centers in space" thing is a marketing campaign to get people to buy the stock. Stop drinking the kool-aid.
And radiation... the entire thing can get knocked out by one solar flare. This would be entirely uninsurable and such a catastrophic failure mode is insane for a cloud that is supposedly going to run most of the world's productivity. If it can replace workers and its susceptible to getting knocked out it would literally cause the largest economic crash imaginable when its knocked out.
Also jamming, space missles, asteroids, so many avenues to just financially cripple the world if a bad actor wanted to.
Elon has come up with so many silly ideas over the years that I completely forgot about the hyperloop lol.
Even if I ignore the business of SpaceX, I still wouldn't buy it because it's run by the most unreliable CEO of all time. This guy is the definition of failing upwards.
remember to build these ground stations
Yes, that is true, but I would say that is the equivalent of putting in high capacity fiber optic cable from datacenters to ISP. Those fiber optic cables need to be a couple of feet deep underground, and that is an expensive process over distance.
That is probably the main reason why they are trying to build datacenter in urban-adjacent rural areas rather than going far out to completely empty areas to avoid pesky zoning boards.
Jeez, I thought this sub is somewhat representative for the stockmarket. I unsubbed now.
It's cheaper to just build it on earth by orders of magnitude you imbecile.
Ok show me your math ?
You're misunderstanding how that energy is radiated and you're assuming a very large duty cycle on radars i doubt ever operate at high duty cycles. In radar satellites a huge chunk of the energy leaves as radio waves, not heat.
In compute racks, eventually basically 100% of the energy in comes out as heat. No work is performed, very little is radiated otherwise.
I'm going to leave this link here. In all reality, this is going to be the catalyst that crashes the AI bubble https://www.reddit.com/r/theydidthemath/comments/1quvbi4/self_more_on_the_cost_of_data_centers_in_space/
FWIW, ChatGPT disagrees with you. I just posted it as a prompt and cross checked it.
\- Comparing only capex is misleading
\- The satellite cost estimate is probably far too low
\- The heat problem is not “misinformation”
\- Power generation is understated
\- Networking may be the hardest problem
Is ChatGPT missing something?
Nope and good call on networking. On earth we are using switches that are passing terrabits of data at insanely low latency between systems. I cannot imagine what it would take in power to beam this around between satellites using some crazy microwave array and theres no way latency would be comparable because modulation/demodulation of signals has a latency penalty when we are talking about these crazy high bandwidth links especially with 1 billion QAM or whatever they do.
energy is an issue dude. Those GPUs suck up so much power, you’re sure solar panels are sufficient? How much solar panels do you need?
Heat dissipation in a vacuum? are you kidding?
you need liquid cooling , how to do that in space?
if cost is comparable, why go through the trouble of launching data center in space? Just do it on earth, isn’t it better?
The ISS radiator system, which is a hodge bodge of older systems coupled together over 20 years is 9 tons in total and radiates up to 120Kw
However, heat loss from radiation scales up much higher with temp, the higher the temp the much higher the heat loss. The ISS needs to maintain a temp compatible with human life, less than 30 C at most.
A modern GPU can tolerate 80 C, and no body dies if it burn up, so you can get away with a much smaller radiator.
And then you get all the efficiency of modern tech over 20 year old tech.
But yes, the radiator and solar panels will make the majority of the satellite weight, the chips themselves are tiny if you take away all the racks and server cases used on earth, which you wouldn’t need in space
There’s no way the radiator + solar array weigh less than about 15,000lbs, plus the 2,000 for the server itself. So that alone skews your cost benefit analysis significantly.