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Not everyone buys Elon Musk’s vision for orbital data centers<\/a>. <\/p>\n Masaeshi Son, founder and CEO of Softbank, argued at a recent shareholder meeting<\/a> that building data centers in space will not cut costs and will take too long, when “in the battle for artificial intelligence, the next few years will be far more important than what might happen in a decade.”<\/p>\n For the last episode TechCrunch Capital Podcast<\/a>Kirsten Korosek, Sean O’Kane, and I discussed Sohn’s remarks as part of a broader discussion that included OpenAI’s plans for custom chips<\/a>microcircuit manufacturer Groq’s New $650M Funding<\/a>and much more.<\/p>\n Kirsten noted that it’s “very ironic” that Son is playing the skeptic here, given SoftBank’s “long history of wild bets.”<\/p>\n Sean, meanwhile, said that when Musk talks about “creating a constellation of satellites \u2014 satellites that also need to be replaced every few years \u2014 to create an ‘orbital data center,'” he’s just “guaranteeing a lot more business” for SpaceX.<\/p>\n Keep reading for a preview of our conversation, edited for length and clarity.<\/p>\n Sean O’Kane:<\/strong> Listen, neo-cloud is the new oil and anyone who wants to make money is moving to neo-cloud. I’m proud to announce that TechCrunch is now a neo-cloud, give us all your money.<\/p>\n I mean you do it. It seems like there are so many players that have limited computing power, so anyone who wants to rent out that computing takes it, whether it’s Groq, a company that was spun off by Nvidia, or Allbirds, which went bankrupt and came out of it as a new neo-cloud vendor instead of selling shoes \u2014 Tim Fernholz did it interview with the new CEO of this new company<\/a> which I definitely recommend people go read. <\/p>\n Or you’re SpaceX, where your idea was: I’m going to build an artificial intelligence platform that has an addressable market the size of US GDP, but before we get there, we’re just going to rent out our computer. And we’ve seen that continue to happen with SpaceX, where it’s not as big as the deals they’ve done with Google or Anthropic, but they just signed another deal<\/a>(their) first post-IPO deal to lease computing resources to another smaller player. They continue to walk this road. <\/p>\n You know, I can see this being a business for Groq in the near term. The question in all of this is how durable it is in the long run.<\/p>\n Anthony Ha:<\/strong> When we talk about SpaceX and their AI and data center business, we also have to talk about these comments that Masayoshi Son, CEO of SoftBank, made recently, where he basically said: What is the point of data centers in space?<\/a> We asked that question in this show. <\/p>\n And that, again, speaks to the industry’s sense of really, really computing constraints — they need to build as many data centers as they can, (and) there are all kinds of reasons why that’s proving to be a challenge here on Earth, so maybe space is the answer. But I think Son makes some pretty fair points: All these things that we’re talking about, even if it all works\u2014and the costs are going to be very, very substantial to make it work\u2014it’s not going to happen for years and years and years, so it’s not a solution to any immediate problem as far as the current need for data centers.<\/p>\n Kirsten Korosets:<\/strong> I just want to point out that SoftBank has a long history of making wild bets. I think it says something when Son comes up and asks a question that a lot of people have been asking. <\/p>\n I mean, there’s a lot of venture capitalists and founders (who) were excited about the idea of \u200b\u200borbiting data centers, and it seems like all of a sudden everyone’s on board. If only a couple of years ago, I think if anyone would have mentioned it, it would have been a bit of a downer. So I think an important part of the process is that someone who has a fairly high profile is asking that question. But it’s very ironic for me he<\/em> is the one asking because if you look at his pitch deck<\/a>they threw a lot of money at some pretty bold ideas.<\/p>\n Sean:<\/strong> WeWork! Listen, we’re going to be saying this a lot over the next few years. The idea of \u200b\u200bputting these things in space is going to be an interesting engineering challenge and certainly an interesting economic challenge. <\/p>\n Anthony, what you said is true to an extent. Elon Musk is a man who hates red tape, and you know there are no NIMBYs in space, so of course he’s going to try to do it. <\/p>\n For me, it boils down to this: SpaceX’s business as it stands, especially the launch business, is heavily dependent on Starlink. The reason they’re 80 or 90% of the global launch market is not only because they’ve done all these things better than almost any other launch provider around the world, but because they have Starlink, which increases that number. If you take Starlink out of the equation, they’ll be closer to – I don’t know, maybe 20% or 30% of the launch market, or 40%, but it’s definitely not going to be 90%. <\/p>\n And when you’re talking about building a constellation of satellites — satellites that also need to be replaced every few years — to create an “orbital data center,” quote unquote, you’re just guaranteeing a lot more business for your startup. And I just can’t stop myself from going back to that moment.<\/p>\n Kirsten:<\/strong> I want to say very quickly that another big business (SpaceX) rents out their computing facilities, by the way. So, back to the chip talk. We have come full circle.<\/p>\n Anthony:<\/strong> One of the other themes that can run through this episode is the idea speak your own book<\/a>. This is not a new phenomenon. CEOs of technology companies or any other company, what they predict for the future will ultimately be beneficial for their business. <\/p>\n But I think that’s always something to keep in mind when we’re having these conversations about big AI companies, because it’s a moment of incredible uncertainty, and we’re all wondering: What’s the job market going to look like in the future? What impact will it have on the environment? What skills do I need to learn? <\/p>\n All these AI executives or AI investors, they’re all thinking about this. And it’s not that they are wrong or that they are deliberately misleading, but in each case there is an asterisk in these predictions. In Musk’s case, he’s talking about something that would be very good for SpaceX’s business. In SoftBank’s case, they are very, very significant investment in data center projects<\/a> here on Earth. Sam Altman is another famous figure rolled his eyes a little<\/a> to the idea of \u200b\u200ban orbital data center — and again, he and Elon Musk obviously are a long and complicated history together<\/a>.<\/p>\n All this means that there are simply no objective, unbiased observers. It’s all these people with baggage and huge money on the line.<\/p>\n<\/div>\n