Space data centers drive a big chunk of SpaceX's valuation, and the gap between that story and what engineers say is actually possible is wide right now.
- Sam Altman and Elon Musk traded public jabs over the weekend, with Altman calling out SpaceX for selling investors on “short-term space datacenters.”
- Space data centers are the main driver behind SpaceX’s roughly two-trillion-dollar valuation, but experts across the industry question the near-term economics.
- Rival startups, Google’s own orbital compute team, and independent engineers all reach the same conclusion on cost.
- Musk points to Starship’s next test flight, expected as soon as July 16, as the path to closing that gap.
- SpaceX has already conceded in its IPO filings that Starship may not be fully reusable near-term.
What Happened
Sam Altman and Elon Musk traded barbed posts over the weekend after Musk accused Altman of running a scam. Altman fired back, saying Musk is the one selling public market investors on “short-term space datacenters.”
The jab lands on real substance. SpaceX’s plans to launch a fleet of orbital data centers for AI inference are the main driver behind the company’s roughly two-trillion-dollar valuation, with bullish analysts framing that processing power as unprecedented for the AI boom.
Experts across the space data center industry disagree with that framing. Founders at rival orbital data center startups, Google’s own team developing its orbital compute project, and independent engineers who have run the numbers all reach a similar conclusion: the economics won’t work at scale until rockets get much cheaper and high-powered satellites can be mass-produced.
Musk’s counter rests on Starship, SpaceX’s next-generation rocket, which is expected to attempt its next test flight as soon as July 16. Getting Starship to fly reliably and repeatedly is the piece that could make the business case close, but SpaceX has already conceded in its IPO filings that Starship may not be fully reusable in the near term, meaning it may need to expend a second stage on every launch.
Why It Matters
For founders evaluating SpaceX or any orbital compute story as part of their infrastructure roadmap, the gap between valuation and demonstrated economics is wide right now, and that gap is being litigated in public between two of the industry’s loudest voices.
Even a fully successful Starship test flight would only prove the vehicle can fly, not that SpaceX can build and launch high-powered satellites at the volume needed to make orbital data centers commercially viable. Engineers who have modeled the economics put that timeline closer to the 2030s.
Homeboy, you’re the one sellling [sic] public market investors on short-term space datacenters. Sam Altman, CEO, OpenAI
Bottom Line
Watch Starship’s next test flight around July 16, and more importantly, how many times SpaceX can repeat a clean flight afterward. One successful launch proves far less than a track record does.
For founders weighing space-based compute claims from any provider, the safest read right now is to treat orbital data centers as a 2030s bet, not a near-term infrastructure option, regardless of how confidently either side argues the timeline in public, a story worth tracking with Relve, an AI trends intelligence platform.
