The New Space Race: Startups Press Ahead on ‘Orbital Infrastructure,’ Test Feasibility of Data Centers

1. Key Themes

Theme: Space-based compute is moving from concept to early experimentation

Real hardware is now flying

Google has put AI chips in orbit as a test, a sign that incumbents are validating the concept alongside startups.

"A SpaceX rocket earlier this month carried an experimental Google satellite that will make simple requests to Gemini while researchers test how its four TPUs hold up in space."

The concept is shedding its sci-fi status

"Space data centers, once confined to sci-fi novels and ambitious pitch decks, are beginning to get real."

Theme: Vertical integration is the strategy for making orbital compute economical

Cost parity with terrestrial compute is the stated goal

Cowboy Space is building its own launch capability rather than relying on third parties.

"Bhatt told Newcomer that his company's 'north star' is to make space compute cost-competitive with terrestrial compute, and that it's vertically integrating to the extreme to achieve that end."

Purpose-built rockets for data center payloads

"Cowboy Space... this week unveiled an even bigger swing: its own purpose-built data center rocket that can carry five racks of NVIDIA Vera Rubin GPUs into orbit."

Theme: Space energy and compute are converging

Power beaming is a stepping-stone technology

The subtitle frames energy transmission as a key milestone for upstart satellite and rocket companies.

"Beaming energy to Earth is a big stepping-stone for upstart satellite & rocket companies"

Cowboy Space is testing both ideas in one launch

"The same launch carried the Reason-1 satellite from startup Cowboy Space, which is experimenting with beaming solar power back to Earth with a laser."

Theme: Well-funded startups and top-tier VCs are backing "orbital infrastructure"

Large private valuations are already forming

"Another well-funded player is Starcloud, backed by Benchmark and currently valued at $2.3 billion..."

2. Contrarian Perspectives

Launch services as a second business line, directly challenging SpaceX

Rather than building a rocket solely for internal use, Cowboy Space plans to sell launch capacity to others, taking on the incumbent that carried its own satellite.

"The startup also plans to use this rocket to compete with SpaceX in selling launch services to others under the name 'Big Iron Express.'"

Reasoning: The company is launching on SpaceX today while planning to compete with it tomorrow. This implies a bet that a rocket designed specifically for data center payloads can outperform general-purpose launchers on the economics that matter.

Extreme vertical integration over specialization

Conventional wisdom in startups favors focus and outsourcing non-core functions. Bhatt argues the opposite is necessary to hit cost targets.

"...it's vertically integrating to the extreme to achieve that end."

Note: The excerpt is truncated by a paywall, so supporting evidence for the cost-competitiveness thesis is not available.

3. Companies Identified

Cowboy Space

• Description: Startup developing orbital compute, space solar power beaming, and its own launch vehicle.
• Why mentioned: Lead case study of the new space race, with a satellite in orbit and a data center rocket unveiled.
• Quotes: "Cowboy Space... this week unveiled an even bigger swing: its own purpose-built data center rocket that can carry five racks of NVIDIA Vera Rubin GPUs into orbit."

Starcloud

• Description: Well-funded orbital data center startup.
• Why mentioned: Named as another major player in the space compute race.
• Quotes: "Another well-funded player is Starcloud, backed by Benchmark and currently valued at $2.3 billion..."

Google

• Description: Tech giant running an experimental AI chip test in orbit.
• Why mentioned: Incumbent validating space-based compute with its TPUs.
• Quotes: "...an experimental Google satellite that will make simple requests to Gemini while researchers test how its four TPUs hold up in space."

SpaceX

• Description: Launch provider.
• Why mentioned: Carried the Google and Cowboy Space satellites, and is the competitor Cowboy Space aims to challenge.
• Quotes: "A SpaceX rocket earlier this month carried an experimental Google satellite..."

NVIDIA

• Description: GPU maker.
• Why mentioned: Its Vera Rubin GPUs are the planned payload for Cowboy Space's rocket.
• Quotes: "...can carry five racks of NVIDIA Vera Rubin GPUs into orbit."

Index Ventures

• Description: Venture capital firm.
• Why mentioned: Investor in Cowboy Space (via Jan Hammer).
• Quotes: "...backed by Jan Hammer at Index Ventures, among others..."

Benchmark

• Description: Venture capital firm.
• Why mentioned: Backer of Starcloud.
• Quotes: "Another well-funded player is Starcloud, backed by Benchmark..."

Robinhood

• Description: Consumer fintech company.
• Why mentioned: Cowboy Space's founder is a cofounder, signaling that proven fintech founders are moving into deep tech.
• Quotes: "...led by Robinhood cofounder Baiju Bhatt..."

4. People Identified

Baiju Bhatt

• Description: Robinhood cofounder and leader of Cowboy Space.
• Why mentioned: Articulated the company's strategy and cost goals.
• Quotes: "Bhatt told Newcomer that his company's 'north star' is to make space compute cost-competitive with terrestrial compute..."

Jan Hammer

• Description: Investor at Index Ventures.
• Why mentioned: Backer of Cowboy Space.
• Quotes: "...backed by Jan Hammer at Index Ventures, among others..."

5. Operating Insights

Anchor on a single measurable "north star"

Cowboy Space frames everything around one economic target: parity with terrestrial compute.

"...its 'north star' is to make space compute cost-competitive with terrestrial compute..."

Run low-cost experiments before scaling hardware

Both Google and Cowboy Space flew small, simple test satellites ahead of larger infrastructure bets.

"...make simple requests to Gemini while researchers test how its four TPUs hold up in space."

Build adjacent revenue lines into your infrastructure

Cowboy Space plans to monetize its rocket by selling launch services to third parties, potentially offsetting capital costs.

"...plans to use this rocket to compete with SpaceX in selling launch services to others under the name 'Big Iron Express.'"

6. Overlooked Insights

Hardware reliability in space is still an open question

Google's test is explicitly about durability, not just feasibility. How chips withstand radiation and the space environment could determine the entire category's viability.

"...researchers test how its four TPUs hold up in space."

Rack-scale payloads signal confidence in next-generation GPUs

Cowboy Space designed its rocket around a specific, not-yet-ubiquitous NVIDIA platform, implying planning for dense, high-power compute rather than small experiments.

"...can carry five racks of NVIDIA Vera Rubin GPUs into orbit."