Building the First Data Centers in Space Transcript, AI Summary & Key Points

00:00 First thing every space company should do is book the first available launch they can [laughter] >> before they built the thing that they're going to launch >> before they built the thing. Before they probably even know what they're going to launch. Booking a launch is such a good forcing function for a space company. So we founded the company January 1st 2024.

00:15 January 2nd we booked the first available SpaceX ride share uh launch and we were like okay something is going to be on that rocket. I'm not sure 100% sure what it's going to be at this point but something is going to be [laughter] on there. >> Sounds like the same advice for all the software companies. He's just going to keep launching and launching.

00:29 Same thing. >> Welcome back to another episode of the Light Cone. Today we're sitting down with Philip Johnston, the co-founder and CEO of StarCloud. StarCloud is building data centers in space to address the energy bottleneck that AI is creating here on Earth. Earlier this year, they raised $170 million led by Benchmark and became the fastest growing unicorn in YC history just 17 months after demo day.

01:03 Philillip, welcome to the light cone. >> Thanks so much for having me. >> So to start off, why data centers in space? >> So we are very quickly running up on constraints on where we can build new energy projects terrestrially. And so by building them in space, we get access to this almost unlimited lowcost energy in the form of solar. Um, of course there's other costs like the cost of launch and the cost of launch is actually very rapidly trending down, you know, with new launch vehicles coming online, the Falcon 9

01:30 program and and Starship on the horizon. Um, and so that's the reason we're building data centers in space. >> How did you come up with the idea? It's not sort of like the typical idea that I feel um people come up with. [laughter] I'd actually been working uh I was with Mckenzie for a few years working with the space agencies of different governments and I could see that the launch cost was very rapidly trending down and actually in early 2023 I decided randomly on a weekend to take a trip down to Starbase Texas where

01:58 they're building the Starship launch program even before the first launch and not many people were were paying attention back then and I could see that they were just building a ma enormous capacity. So they're building these two Starship gigafactories. They're designed to produce something like three Starships per day. And because Starship is reusable, you know, on a sort of three or four year time frame, that could lead to us having thousands of times the capacity to get things to space.

02:19 And so I started thinking, okay, let's just uh run the clock forward. If the launch cost was 10 times lower than it is today, and the launch capacity was maybe a thousand times more than we have today, what would make sense that that currently doesn't make sense? And so started thinking about some of the concepts from sci-fi that I remember as a kid, you know, like space-based solar where you have these huge solar panels in space, you beam that power down.

02:39 Um, and essentially, yeah, just reached out to to a few folks I, you know, I knew in the space industry and got connected with a few others and started, you know, ideulating on, okay, what would make sense if the launch cost was much lower than it is today? >> I'm curious, are there any other ideas that occur to you during this process when you were like thinking of like what what people could build in space?

03:00 cheap. >> Yeah, tons. I mean, we definitely looked at manufacturing in space and there's VA. We looked at Astro asteroid mining and uh you know, obviously YC has astroforge. Um we looked at space hotels. We looked at basically anything where which could make sense if the launch cost was a lot lower than it is today. >> And how come data centers was the best choice?

03:20 >> Data centers makes a lot of sense to be the first thing you do because you don't need to re-enter a product. So with things like um uh asteroid mining or with uh manufacturing in space or space hotels, they require this very expensive re-entry process. Initially what we actually started doing was space-based solar. So huge solar panels and then you beam that power down and it's it's a concept from I think like the 60s.

03:40 Even Azimov in the 40s was writing about it. The problem with space-based solar is you actually lose 95% of the energy in transmission from space to Earth. And so for the first two months of the company, that was literally what we're doing. We were called Lumin orbit because of that that reason, luminosity in orbit in orbit. We were thinking, okay, once we get that power down, what are we going to be using it for?

03:59 And even back in 23, most new energy projects were being built for data centers. So, we were like, okay, well, either directly or indirectly, this power is going to go into data centers. Let's rerun those numbers. So, initially, we'd run the numbers to know what's the launch cost break even that makes sense for spacebased solar. And we'd come to a number of like $50 a kilo.

04:17 So, then we rerun the calculations. is we were like, "Okay, let's spend a month figuring out what would the launch cost break even need to be to make uh data centers in space break even." And we came to a much closer to reality number of $500 a kilo. And that's what we think currently that the break even launch cost is. Um, and so then we rapidly pivoted the company towards that.

04:36 [laughter] >> So, Philip, you launched StarCloud 1 in November of 2025. Uh, and that was a real emotional moment. Like, can you walk us through what that was like? >> Yeah, I mean, it was incredible. So just to tell people a bit about StarCloud 1. So we'd set this launch date um you know 18 months in the future and we initially started with something quite unimpressive um like we were going to fly some Nvidia jets and chips.

05:00 They've been flown in space before and we were going to try and do some new new workloads on there. Um yeah so it was ADI that came on and said no we need to do something way way cooler than that. And uh we actually ended up putting five GPUs on there. Two three from Nvidia, two from ARM. Um but the most interesting one was this Nvidia H100. We did some crazy things like for example you have to put it through thermal cycling um and we didn't have time to we like book the the vacuum chamber the thermal and vacuum

05:27 chamber and but we needed to know okay if we heat up this phase change material and cool it down heat it up and cool it down is it going to crack anything and so at like 5:00 a.m. the day we had to ship it down working through the night and Ezra like dunking this thing in an ice bath to cool it down. >> Oh my [laughter] god. And then we pull it out the ice bath and I'm like, "Are you sure it's going to be fine with the electronics?"

05:49 They're like, "Don't worry about it yet. It's totally fine." They pulled it out the ice bath. Then we had these like like hair dryers to heat it up and melt all the wax >> like or like hot air guns and then we're dunking it back in the ice [laughter] bath. It is a miracle that it works to be honest. >> You can just do things. >> You can just do things.

06:04 Yeah. this so this is the kind of thing you can do as a startup because we actually had a quote from one of the primes on what it would cost to do StarCloud 1 and they said $75 million to $100 million and we did the whole of Starcloud 2 including the launch for $2 million. >> Yeah. >> So yeah, leading up to the to the launch >> I mean we we got the most incredible separation video.

06:22 I think we're going to play it now. >> StarCloud one separation confirmed. >> So half the time as it deploys it will be behind the shadow of the earth and you don't see anything. The other half of the time it will deploy not into the silhouette of the Earth. And so I mean it just is the most perfect like deployment video I've ever seen. And this was played by Jensen as he walked on stage at the GTC conference this year.

06:43 This five story tall like uh screen behind him playing the Starcloud one separation video. >> Amazing. [clears throat] >> Um so no it was the most incredible feeling seeing this deploy. >> Where was the team for this? Did you all >> we took the whole team down? Yeah. There was only 12 in the team at the time of StarCloud one launched. So, we took the whole team to Florida and we had like a hundred friends and family investors.

07:02 We some of our team brought their family and kids down and like it was a real nice uh really nice day. We're going to release a a behind thes scenes video of some of the like family moments in that uh launch. >> How long was it from like when the rocket lifted off until the thing deployed until you powered it up and were able to verify the thing actually worked?

07:23 >> Yeah, so it lifted off. We were all on what they call the banana bleachers. It's like the famous from the Apollo era, but it was in the middle of the night. So, it lifted off at around midnight and then at 1:00 a.m. they closed the bleachers and everyone had to get on a bus and leave. And we're like, "Oh I thought we were going to like be able to watch the deployment."

07:39 And then I'm sitting in the back of a cab like watching the live feed on SpaceX.com. [laughter] Literally, I was, "Oh my god, it's deploying. I can't believe it's deploying." Um, and then it took about 12 hours to make first contact, which is not bad actually. It usually takes at least 24 hours to get first contact. And then it's like a twoe commissioning period.

07:56 And we had a whole bunch of software issues we had to work through. Um like it kept the whole satellite kept restarting every 2 hours. And what was happening is one of 20 different um like failure uh like triggers was triggering and we didn't know which one it was. And we can only get a ground station pass every like at least every hour and a half maybe longer.

08:15 And so we had to manually turn off each one, turn back on everything else and wait for a ground station pass to know which one it was. So that took like you know that took like 3 days just to figure out that software issue and then yeah two weeks after that then we started commissioning and turning on all the different payloads and then we trained the first model ran the first version of Gemini we did the first fine tuning of a model on in orbit um did the first high power inference on on satellite imagery and all this

08:41 kind of stuff. >> So StarCloud one right now as we speak is just left Chinese airspace I think about to enter Japan. >> Yeah. [laughter] >> It's going quite fast actually. >> Yeah. So, it travels around 17,000 mph. It's uh it's it's about an hour and a half to do one circumnavigation. >> So, I mean, by StarCloud 4 or so, this won't be like one. It'll be a giant network sort of covering the Earth, actually.

09:08 >> Yeah. From StarCloud 3 onwards, we'll have 88,000 and they'll all fly. This one is in what they call mid-clination orbit, so it doesn't go over the poles. Um, StarCloud and and that's another point here on how janky this one is. It doesn't even fly in the right orbit, but at least it it it uh enables us to test the hardware. Um the next one will fly over the poles, and that gives us 24-hour always in the sun.

09:32 >> In order to do that, you need to put thrusters on the satellite to move it into that orbit. >> In the end, they will be deployed in that orbit, but you need thrusters anyway to maintain the orbit because you have, you know, drag from the upper atmosphere there. >> What are the engineering and physics trade-offs you have to make this happen? Because what you basically are doing with StarCloud is you're getting infinite energy because the sun is basically the natural fusion reactor is just a giant mass that generates

09:55 an nuclear reaction with the giant mass and you have infinite energy basically abundant and lots of space. But as a result of that which we we're constrained of that in Earth you have a bunch of other really hard problems to solve like things around interconnect. How do you send all the data back and forth back to Earth? How do you handle cooling? People think that space is cold, but actually there's no, unlike Earth, there's no air to c circulate it back.

10:22 So, you need some crazy solutions with cooling. There's things around radiation to flip the bits in in in processors. And there's probably other things around how to get the solar panels to become really big and expand. And many more. I mean, these are the ones that I could think of. I mean, what are there's like so many things that are just so hard to build.

10:42 Yeah, you are correct. There are many engineering challenges to to to be solved. The two biggest ones that are outstanding and most of our engineering our engineering team is split basically 50/50 down these two lines is number one as you mentioned how do you get rid of this heat in a vacuum and then number two how do we make the chips work in a higher radiation environment.

11:03 Some of the other problems are being solved by other people. You know, the interconnect. We've just signed a contract with SpaceX for our next 20 satellites to have a Starlink laser terminal that gives us very high bandwidth, low latency connectivity. Other people are solving some other parts of this. The the core ones we're solving are that. And so for the first one, for the thermal management side of things, um we are building a very large lowcost and low mass deployable radiator.

11:26 Now, radiators in space are not new. It's not a new physics um you know, solution. It's it's more of a manufacturing and engineering challenge because the you know the international space station has had a radiator which dissipates you know lots of heat already very similar mechanism so uh a liquid cooled loop the challenge with it is making it cheap and light so our radiator is at least 10 times less mass per watt of dissipation than the ISS radiator and uh 500 times less cost per watt of dissipation than the ISS

11:56 radiator. So very low bench, very easy benchmark to beat on cost for the ISS. But um yeah, and then on radiation, it's just a lot of ground testing in different particle accelerators. So we've done um several rounds of testing at the Brook Haven National Lab particle accelerator for heavy ions and also at the there's a cyclron for high velocity protons down in Knoxville.

12:14 So we ship all of our hardware down there. My co-founder Addy runs in and out wearing this protective thing. [laughter] Addy is a lunatic when it comes to this stuff. He's like, "Oh, yeah. It's the same as flying transatlantic. Don't worry about the radiation." [laughter] So, yeah, basically, you expose it over a 24-hour period to the same radiation dose that you would have in a 5-year mission.

12:35 And then that all of that telemetry and data then informs our choice on both shielding and software to mitigate bit flips. I think we're the only people in the world now that know where both an H100, a B200, H200 will fail if you blast it with high velocity protons and heavy ions. >> Do you have to change any of the underlying electronics to solve the problem or you just build shielding around it?

12:54 >> Uh, both. both. So we do build shielding around it. Um there's a lot of it is just component selection. So for example, all of the SSDs, all of the power delivery system, all of the power converters and everything else, we we test 10 components and whichever the best one is, we pick. We're trying not to use space radard uh components. We're trying to use offtheshelf like automotive style components because it's way cheaper and most people have never tested those in radiation chambers.

13:19 I think that's one of the secrets of how SpaceX has actually reduced a lot of the costs of uh a lot of the satellites as well. They use not space graded electronics which would be exorbitantly very expensive but instead you take regular components that there's a supply chain and run through all the tests and make sure if it works and I think actually this is uh one of the things that Strannis does as well to make sure that telecommunication satellites actually work in space because they're they're also in um in GEO

13:48 which has more radiation. Are you in GEO as well? >> No, we're in Leo. Yeah. >> When you first told people that you were going to put data centers in space, what were people's reactions? [laughter] >> Uh, for a very long time, their reactions was, uh, this is the dumbest thing I've ever heard. [laughter] Um, so the, yeah, we we tried to we actually applied to YC once and we got we then tried to raise and it took we tried to raise 2 million at 10 posts on a safe.

14:17 It took 3 months and we got rejected from at least 100 VCs. And then even after YC um when we went out to raise after demo day, I think we got rejected from at least 20 VCs before we got to the first uh the first check. This is one of these ideas that was like extremely unpopular with investors and if you had believed the if you had listened to what all the investors were telling you, you would have quit and not ever done this idea.

14:39 I'm curious, why did people tell you that they were not investing and what did they get wrong? people had a hard time visualizing a world with lowcost launch and and to be fair, we're still not out of the woods on that front. Um, you know, lots of things need to go right with the Starship program for that to make sense. So, that that's one thing. I think it just sounds too sci-fi and two, yeah, it's a to make this work.

15:01 There's a convergence of two factors. One is um the launch cost coming down and people have to believe that. The second is it becoming way harder to build stuff terrestrially. Maybe two years ago that wasn't quite as obvious as it is today. Now people are like, "Okay, well they just banned building new data centers in New York. They're going to ban it in like seven other states."

15:19 Now that th those two things I think converged to make it more investable essentially. >> And I think the thing after hearing you explain all the engineering and physics, it actually is doable. It doesn't sound like sci-fi from first principles. It's like it's actually buildable. The reason I had confidence in it um is because we had such a strong engineering team.

15:41 So if if you have you know the world's best space engineers saying this is possible and to be frank my background isn't as a space engineer but uh you know I have full confidence in my my two co-founders one from SpaceX the other was building satellites for NASA saying it's possible then you know that's a it's a it's good enough for me. [laughter] >> Once you had the idea and then I say once you're in YC how did you sort of break the problem down into like a plan for what to do?

16:09 Obviously in software it's you know you think of your MVP and you launch quickly and you get feedback but hard to do that with data science in space. [laughter] >> I have a very tangible piece of advice for all space companies. The first thing every space company should do is book the first available launch they can >> before they built the thing that they're going to launch >> before they built the thing before they probably even know what they're going to launch.

16:29 Booking a launch is such a good forcing function for a space company. >> Um so we founded the company January 1st 2024. January 2nd, we booked the first available SpaceX ride share uh launch and it was cheap. It's like 300 grand, you know, >> which was how far out was the launch? >> Uh it was 18 months out and then it got pushed to 21 months out and we were like, okay, something is going to be on that rocket.

16:50 I'm not sure 100% sure what it's going to be at this point, but something is going to be on [laughter] there. >> It's going to happen. >> That's interesting. >> Sounds like the same advice for all the software companies. Just got to keep launching and launching. Same thing. >> Yeah. [laughter] Yeah. And what what we initially planned to launch was very unimpressive actually.

17:05 It was like we were going to put a Jetson chip which has been flown on many satellites before and we were going to use it for for kind of edge processing and things. We actually had a co-founder change quite early on and when we got Addi from SpaceX, Addy was like, "Oh, that's that's lame. Like, let's let's put an H100 on there." We're like, "Addy, you can't put H100 on a on a satellite."

17:25 He's like, "Sure you can." [laughter] The amount of people who said it was physically impossible to run a p like a a chip that's that power dense. um in orbit like people just thought it was like literally impossible to run data center grade you know GPUs on orbit >> what would have caused it to be impossible >> there's two things one is the thermal side of things they very power dense they produce a lot of heat and the second is they had never been tested in the radiation environment of space um and both of those so

17:50 for the first one like it's kind of a wacky solution like we submerged the entire thing in this phase change material so the everything on StarCloud one is is submerged in this um like phase change material. So it's like um immersion calling for all of the components, all of the power delivery, memory, everything is submerged. Um like nobody's ever considered doing anything like that in space before.

18:14 It it's not a particularly scalable solution. It's not like you have quite a low duty cycle. You have to wait for it to melt and then uh and then um and then it solidifies every so often. But it enables us to prove that you can run the H100 in space. The the next one is this director chip liquid cooling architecture that we can run continuously. Um, but yeah, I mean I I give full credit to my co-founder Ali for coming up with some pretty wacky and crazy ideas >> to get to a data center that's like commercial scale

18:40 where you can actually like make money on it. It's actually like profitable. It's going to require many steps. How did you like think about like sequencing out like the journey to get there? >> So as I say, first step was book whatever the like first launch lowest MVP we can have uh available. Second step is producing something which is a com like a a product we can sell to customers.

19:01 So that's StarCrowd 2. That's a 10 kilowatt spacecraft that we can sell compute to government and military satellites. And then the third step is the product that we're going to be able to sell to hypers scale data centers. So that's the Starcloud 3. We can it's 200 kilowatt 3 ton spacecraft. It's about 6 m long. With that we can fit 50 of them per starship.

19:21 So about 10 megawatts of new compute capacity per Starship. And we've just filed with the FCC for a constellation of 88,000 of those. So that means on the order of 20 gawatt of new compute capacity. >> Wow. >> And we can fit up to 10 terowatts uh in the Dawn suns synchronous orbit. So that's like 20 times the entire US power grid. >> For context, what's the largest uh data center deployment on Earth?

19:41 Because you're talking about 22 gawatt. Oh my god. What's what's the largest one here on Earth today? >> Uh they're about a gigawatt is the is the largest. Yeah. >> What's the timetable for all of this to become real? >> Yeah. It's very dependent on the launch cost and so um you know this estimates for Starship if you believe Elon it will be end of this year but let's say uh could be end of next year early 2028 for Starship uh deploying uh you know ramping up the launch cadence.

20:09 They're actually phasing out Falcon 9. So um they're going to be moving over commercial customers to Starship. There's also a whole bunch of other launch vehicles coming online. Stoke space has the Nova rocket. Um Rocket Lab has Neutron. Blue Glen uh Blue Origin has new Glenn. So end of 2028 I'd say is when we're starting to ramp up for the terrestrial business competing with terrestrial data centers.

20:30 So your customers are actually anyone who wants compute and then initially >> initially it's government and military but then as Starship ramps up so for the next two three years we're we've just won four contracts with various DO and government entities >> and then initially also um it's people who want that compute actually like for other purposes in space then is that right?

20:51 Yeah, exactly. So, right now many satellites are very constrained with the amount of data they can down link. And so, using optical terminals, we'll have three optical terminals on our second satellite. They can ship enormous amounts of raw satellite imagery um and SAR data, synthetic aperture radar data to us. We then process that on orbit and then we can just down link very quickly the insight from that and the insight might be the coordinates of a vessel or something like that.

21:15 In terms of Nvidia, I mean are you how are you partnering with them around chip design and you know are there changes that you have to make to the design to I mean as you reach scale like being making it more radiation resistant or you know what does that look like? >> Yeah. So we're working very closely with Nvidia. Um they we recently announced this uh Reuben space Reuben one chip that we're working with them on.

21:38 Uh so that's designed for the space environment. We very heavily modified the H100 to make it work in space. So on the mass side of things, we stripped out a lot of things like the um AC to DC converters, the um the direct the uh cold plates and everything else we stripped out and then we stiffened the board and made it radiation tolerant. So because of that they they're very interested in you know we're the only people basically that have any data on how one of these high power GPUs operates in space.

22:06 Um, so yeah, we're working with them very closely on um designing this new space chip because you can actually do very simple things to make these chips way more effectively effective to run in space. And so that's what we're doing. >> YC's Next Batch is now taking applications. Got a startup in you? Apply at y combinator.com/apply. It's never too early and filling out the app will level up your idea.

22:29 Okay, back to the video. I think the thing of uh getting GPUs to now natively run on DC, you avoid the whole conversion of energy e ACDC because that's what makes solar panels not as efficient is the whole conversion. You lose a lot of power which is >> Yeah. our solar panels generate DC immediately. So there's no point doing we we just need DC toDC converters.

22:51 Um but that's much better than AC to DC converters. So you could unlock a bunch of uh companies also just building GPU data centers using solar power period. Yeah. Whether in space, under the water or in Earth. >> Yeah. I mean, yeah, actually people can definitely use this tech for other things. Yeah. >> You talk about StarCloud 2 a little bit more.

23:11 Like is there actually a Bitcoin miner in there as well? [laughter] >> Yes, we will be flying a Bitcoin mining ASIC next year, which the crypto community is very excited about. There's much more enthusiasm than I was expecting to be honest about that. So [laughter] >> loves a good narrative. The number of people that want me to launch Starcoin. You have no idea.

23:31 [laughter] >> There is actually a StarCloud memecoin, I think, out there. >> Yeah. Don't buy it. [laughter] It's not official. >> Do not buy the StarCloud memecoin. >> Yeah. Yeah. >> So yeah, we we'll be launching we'll be we'll have one of those on there. Um we'll have a whole bunch more H100s, Blackwell ship. Um we're also partnering with AWS on launching the Outpost hardware.

23:52 That's their on- premises server blade that they give to customers to run a local instance of VC2 and that will be useful for particularly for our military customers. >> Something we were talking about earlier is uh at YC we've just observed over the last few years it's been quite hard for hard tech companies to raise funding in general. There's not been much investor appetite for it.

24:10 It certainly seems to have changed over the last 6 months. from your perspective. I'm curious like how was it raising the seed round in Jur during YC and then this huge round you raised from um from Benchmark to sort of maybe tell us the inside story of kind of how that all came together and what it feels like being a hard tech founder raising money today.

24:32 >> So when we first raised uh end of 2023 we tried to raise $2 million at 10 post and yeah that took three months to get together about 100 VCs said no. Yeah, deep tech and hard techch in space were definitely not a cool thing to invest in back then. Um, then after YC, yeah, we we it took us quite a while to raise. So, I think we got rejected from at least 20 VCs before we got our first uh first check on the demo day raise.

24:54 And things have definitely swung around since then. Um, it's become a lot uh easier to race for deep tech. I think I think a number of reasons for that. One is people think that software doesn't have a moat anymore which I think is probably accurate >> that sort of hive. It's funny like the hive of mind just switched like seemed to me like very quickly.

25:14 It was just like the SAS stocks like Claude code came out SAS stocks public company stocks all went down and then suddenly it like was I I think that like fastest I've seen sort of things in the public markets like directly affect demo day where suddenly everyone's like oh like we need to like invest in hardc now. >> Yeah that's that's fascinating. Yeah I think yeah people are just much more open to investing in hard techch now.

25:34 Yeah, like [clears throat] I think we were the first space investment benchmark of done. >> Yeah, I mean whatever you can sh like how did that round kind of come together and um and yeah, what do you think sort of benchmark saw in sor you guys? >> So to be frank that round wasn't as easy as it looks from the outside. Um there's a lot of VCs that have big SpaceX positions for one thing and SpaceX like midway through the round came out saying they're doing exactly what we're doing and it wasn't public then and so anybody

26:00 with like a conflict policy then was like okay we're conflicted out. Um but I mean towards the end of the round it only kind came together much faster. Um I think [snorts] to be frank I don't think so Chathan is our partner. Chathan's awesome. Um >> amazing investor. >> Yeah he's he's great. I think basically he saw a really really strong technical team doing something that if it worked could be incredible.

26:24 And I think when he came to visit us, you know, he spent a lot of time doing DD on other things, you know, on the backgrounds of all of our we've got the best, we literally have the best freaking engineering team in the world in Redmond building this stuff. You know, half of them from SpaceX, other half from from some of the hyperscalers. Um, so he spent a lot of time with the team.

26:42 He spent a lot of time. Um, but I I don't think if he'd I don't think if he'd come across a report that said that calling in space was impossible that that would have like thrown him off. I think he was like, "Okay, this is a good enough team that they can figure it out." >> How did you build such an awesome team? >> So, my co-founders Addy and Ezra, um I Well, with Ezra, I I reached out to him after I'd been down to Starbase, Texas, and I was like, "Have you got any ideas that would make money if uh launch cost was

27:10 10x cheaper than it is today?" And we started with this space-based solar idea. Um with Addi, who was introduced through to a friend through a friend, and he he actually had already been thinking about this. um he already had registered the domain name stellaccloud.com before and then with the team we were just ruthlessly slow at hiring and like picky about hiring after YC we'd raised uh like 11 million at 40 which is like a decent round in YC and even then it took us 6 months to make our first hire um and we got like

27:37 the most kick-ass space engineer as our first hire. We've raised like a lot of money now. Even this round that we announced in March, we've raised a much larger round since then. We're still only 20 engineers like the and we have one commercial guy who came from the Space Force who was working on Golden Dome. Um we are so picky about who we hire. Like it is to a point of being very frustrating to be honest, but it's the whole game.

28:03 It's the whole game is having an a kick-ass engineering team. What was it like to have this idea, have people sort of poo poo it, like didn't really get it, and then suddenly, I mean, to have much more commercial validation that like, you know, Google, um, SpaceX, the the stalwarts of the industry sort of embraced the idea and realize actually like some crazy percentage of future data centers likely are going to be in space.

28:30 >> What was that like to sort of see the the sea change and be early? >> It was surreal. So if you go back through my Twitter feed, I've been like shouting from the rooftops for the last like three years about this >> con [laughter] but right >> every day I would post something about like why data in space are going to be are going to make sense and then slowly and slowly and slowly people would start to drop hints about things like Elon at one point was like 99.999% of the energy in the in the solar system is is is

29:02 from the sun. So, I'd repost that and I'd be like, "We need to build data centers in space." [laughter] Like like I would like everything I would find a hook for [laughter] like >> I think this is one of the things we see with all the best hard techch founders. You're essentially living in the future and are almost like a prophet that brings the future back to now us underllayings in the earth that don't quite get it yet.

29:26 >> I'm going to tell my mom who's very religious that why she said I'm a prophet. [laughter] >> But I think that's cool. And the other thing that's fascinating to me is that um your background if you go in your LinkedIn is not very legible that you would be in space but you had a background previously doing software and physics and then went to business but nothing there that said space.

29:52 >> Yeah. Um so for people who don't know my background um spent the first five years of my career as a an engineer on the software side studying math and physics before that. um undergrad and masters and then I went to McKenzie more on the commercial product side but I actually ended up doing a couple of projects um with national space agencies on different satellite missions and that's where I really started to notice the launch cost coming down very rapidly.

30:16 actually had another uh startup before this. Um and yeah, when I left that one, decided, okay, if I'm going to do another startup, it has to be something I'm like very passionate about and and yeah, for my whole life, I've been very passionate about space because I don't have a space engineering background. Realized, okay, I'm going to need the world's most kickass space engineers.

30:35 And actually, this is where I give credit to YC. I was kind of blindly following the YC advice. So I was like, "Okay, the first thing we need to do before coming up with an idea is get the most incredible space engineers in the world um on the team." Essentially, >> this was before you even knew what you wanted to do in space. All all you knew at that point was that like launch costs were going to come down dramatically and there were going to be cool stuff to do in space and you wanted to find some space people to do

30:58 it with. >> Yes. Literally, that is literally it. [laughter] >> But it wasn't a vibe of like, oh, can you please build this crazy idea that I have? It's like the reverse even like I'm going to figure out the commercial part. >> Yeah, exactly. My pitch to Addy and Ezra was essentially if you have any ideas that would make sense if the launch cost was 10x less than it is today.

31:17 Um I can figure out everything else around that besides the building the satellite piece. Um >> how did you how did you find them? How did you recruit them? >> Uh so Ezra and I had grown up in the same place in the UK. I didn't actually to be frank I messaged like a lot of space engineers. Maybe 10 of them took a call and two of them said yes. [laughter] >> That's all you need.

31:39 You don't need like a hundred people to do it. You only need one or two. So, Philip, during the batch, the way I thought about StarCloud was that it could only work if you were able to make it cheaper per unit of compute than like groundbased compute. And I think you will, but it's occurred to me since then that like it's not actually clear to me anymore that that is necessary for StarCloud to succeed.

32:02 I'm curious if you think about it the same way because since the batch, we've learned that AI data centers are becoming politically incredibly unpopular and it seems not unlikely to me that it will soon become like basically deacto impossible to build AI data centers like anywhere um at least in like a democratically heighted country. Like I'm curious like how you think about that, how it affects your plans for the company.

32:24 >> Yeah, 100%. And uh this has moved faster than I was expecting as well to be honest. uh you know we've just seen New York now blocking data centers construction um you know for reasons which are not grounded in science really uh you know it seems like more more like vibes than anything else building these things in space will definitely be much easier from a regulatory perspective >> so let's do some myth busting um you there are a lot of misconceptions about certainly water uh and data centers but also power you

32:53 know what are some of the things that come to your mind with water specifically. Um water is really actually just a function of power. Um you know you can cool data centers with no daily consumptive use of water if you're if you just throw more power at the problem essentially. And that is what all of the data center companies are now proposing. It's very unlikely that any data center company proposes any um any any data center that is going to be consuming daily amounts of water.

33:22 And there is actually uh evidence that you can have closed loop systems that consume very little water. And >> uh I think the analogy is like if you ran a burger shop like a fairly large data center with like hundreds of megawws would consume about the same amount of water as like a McDonald's. >> Yeah. >> So it's like it's really, you know, a non-issue, but it's unbelievable that they're repeating this so much.

33:47 >> Yeah. Yeah. They do use a lot of power though. So most new power projects for data centers right now are being built with natural gas generators actually. And so there's certainly some people that are pushing back on on those. >> I mean, you know, one of the arguments is that uh as data centers get built, they sort of uh compete on the grid, which is kind of not true.

34:05 I mean, >> also not true if you if you build a new power project for it, >> right? Which is generally what people are doing. You just can't get enough power from the grid. So >> yeah, >> there's also some evidence actually um that adding data centers um increases the capacity of the grid and then prices actually come down over time. That being said, you know, it's sort of a perfect storm like we need intelligence, we need data centers.

34:29 It's become basically a national security issue, you know, um for America and for the west to have access to intelligence is um sort of the most important tech tree of the next hundred years. And so for tech policy to sort of put us back into the stone age and possibly lose the war for us, that puts StarCloud in a different position in terms of bringing compute and AI and power online.

34:58 >> Yeah, for sure. It definitely puts us squarely in the national security bucket at that point. >> I mean, thank you so much for fighting for the West then. [laughter] >> We're doing our best. >> Yeah. So as one of the fastest growing unicorns in YC history uh and to do it as a hardware company, do you have any closing thoughts for people who are uh you know looking at space looking at hard tech as a thing that they want to work on?

35:21 Like you know what have you learned and what would you tell the uh you know just starting out version of yourself based on where you're at now? >> Yeah, I mean I think there's just huge opportunities now coming in with space. We're really at the like very early innings with what's going to be this enormous industry in space. um you know the amount of capacity and launch that's going to come online in the next five years is is really mind-boggling.

35:41 So yeah, I would definitely encourage people to to step into that. Uh in terms of advice, like the the YC advice stands true. It's technical talent on the founding team is the thing you need to solve for first. Uh and then everything else follows from there. >> Philip, thanks so much for coming on the light cone. >> Yeah, thanks so much for having me. Thanks for being here.