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Starcloud plans its next power moves for AI in space

After taking one small but historic step for space-based AI, a Seattle-area startup called Starcloud is gearing up for a giant leap into what could be a multibillion-dollar business.

The business model doesn’t require Starcloud to manage how the data for artificial intelligence applications is processed. Instead, Starcloud provides a data-center “box” — a solar-powered satellite equipped with the hardware for cooling and communication — while its partners provide and operate the data processing chips inside the box.

Starcloud CEO Philip Johnston said his company has already worked out a contract along those lines with Denver-based Crusoe Cloud, a strategic partner.

“In the long term, you can think of this more like an energy provider,” he told GeekWire. “We tell Crusoe, ‘We have this box that has power, cooling and connectivity, and you can do whatever you want with that. You can put whatever chip architecture you want in there, and anything else.’ That means we don’t have to pay for the chips. And by far the most expensive part of all this, by the way, is the chips. Much more expensive than the satellite.”

If the arrangement works out the way Johnston envisions, providing utilities in space could be lucrative. He laid out an ambitious roadmap: “The contract is 10 gigawatts of power from 2032 for five years, at 3 cents per kilowatt-hour. That comes to $13.1 billion worth of energy.”

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Starcloud raises another $10M for data centers in space

Redmond, Wash.-based Starcloud got its start just last year under a different name — Lumen Orbit — but the newly renamed company is already filling out its seed funding round with $10 million in fresh investment for space-based data centers.

The new influx of capital comes after December’s announcement that the startup brought in $11 million from investors including NFX, Y Combinator (or YC, for short), FUSE, Soma Capital and scout funds from Andreessen Horowitz and Sequoia. Starcloud graduated from Y Combinator’s summer cohort last year.

The additional funding comes from previous seed investors and several new venture capital firms in the form of a simplified agreement for future equity, or SAFE. If you add up the $11 million and the $10 million, “it can be thought of as a $21M seed, which is one of the highest-ever seed rounds for a company coming out of YC,” Philip Johnston, Starcloud’s CEO and one of its founders, told GeekWire in an email. Johnston said Starcloud doesn’t intend to identify the new investors until a Series A funding round takes place.

Starcloud’s big idea is to place a network of megawatt-scale computer servers in Earth orbit, powered by grids of solar panels that could stretch as much as 2.5 miles (4 kilometers) in width. Such space-based facilities would offer alternatives to terrestrial data centers that are taking up increasing amounts of territory, gobbling up increasing amounts of power, and stirring up increasing levels of controversy.