The SoftBank CEO isn’t the only one with questions about the hype around Elon Musk’s orbital data center

Not everyone buys Elon Musk’s vision for orbital data centers.

Masayoshi Son, founder and CEO of SoftBank, He argued at a recent shareholders meeting Building data centers in space will do little to reduce costs and will take a long time. “In the battle for artificial intelligence, the next few years will be much more important than what might happen a decade or so from now.”

In the last episode of TechCrunch’s Stocks PodcastKirsten Korosek, Sean O’Kane, and I discussed Son’s comments as part of a broader discussion that included… OpenAI plans custom chipsChip maker Groq’s new $650 million financingAnd much more.

Kirsten noted that it is “very ironic” that Son is playing the role of skeptic here, given SoftBank’s “long history of wild bets.”

Meanwhile, when Musk talks about “making a constellation of satellites — satellites that need to be replaced every few years, too — to form an ‘orbital data center,’ he is only “guaranteeing more business” for SpaceX, Sean said.

Keep reading for a preview of our conversation, which has been edited for length and clarity.

Sean O’Kane: Listen, new clouds are the new oil, and everyone who wants to make money is turning to the new cloud. I’m proud to announce that TechCrunch is now the new cloud, give us all your money.

I mean that’s the thing you do. There seem to be a lot of players who have constraints in compute, so anyone with a shot at being able to rent that compute will take it, whether it’s Groq, which is a company that was almost completely spun out by Nvidia, or Allbirds, which went into bankruptcy and came out of it as a new provider of the new cloud rather than selling shoes – Tim Fernholz did An interview with the new CEO of this new effort I would definitely recommend people to go read.

Or whether you’re SpaceX, where your idea was: I’m going to build an AI platform that will have an addressable market the size of the GDP of the United States, but before we get there, we’re just going to rent out our computer. And we’ve seen this happen constantly with SpaceX, where it’s not as big as the deals they have with Google or Anthropic, but They just signed another deal(their) first deal after the IPO, to lease computing to another smaller player. They are continuing on this path.

You know, I can see this being a business for Groq in the near term. The question with all of this is how sustainable it is in the long term.

Anthony Ha: If we’re talking about SpaceX and its AI and data center businesses, we should also be talking about these comments recently made by Masayoshi Son, CEO of SoftBank, where he basically said: What are the benefits of data centers in space? This is the question we asked in this presentation.

And that points to, again, this sense in the industry that computing is really constrained — they need to build as many data centers as possible, (and) there are all kinds of reasons why that’s difficult here on Earth, so maybe space is the answer. But I think Son makes some fair points about: All of these things we’re talking about, even if they all work — and the costs are going to be very, very serious to make it work — that’s not going to happen for years and years and years, so this is not a solution to any immediate problem, as far as the current need for data centers.

Kirsten Korosek: I just want to point out that SoftBank has a long history of wild betting. I think it’s saying something when Son comes in and asks the question that a lot of people have asked.

I mean, there are a lot of venture capitalists and founders (who) were attracted to the idea of ​​orbital data centers and suddenly everyone seemed to be on board. I think just a couple of years ago, if someone had mentioned that, they would have been criticized a little bit. So I think it’s an important part of the process for someone of very high standing to ask that question. But it’s ridiculous to me he He’s the one asking that, because if you look His playing surfaceThey spent a lot of money on some very bold ideas.

Shawn: Wework! Listen, we’re going to be saying this a lot over the next couple of years. The idea of ​​putting these things in space would be an interesting engineering challenge and certainly an interesting economic challenge.

Anthony, what you said is certainly true to some extent. Elon Musk is someone who hates routine, and as you know, there are no NIMBYs in space, so of course he will try to do this.

To me, it boils down to this: Business as it stands now for SpaceX, especially its launch business, is very dependent on Starlink. The reason they’re 80 or 90% of the launch market globally is not only because they’ve done all these things that are better than any other launch provider around the world, but also because they have Starlink that drives that number up. If you remove Starlink from the equation, they’re going to be closer to — I don’t know, maybe 20% or 30% of the launch market, or 40%, but it’s certainly not going to be 90%.

And when you talk about creating a constellation of satellites — satellites that need to be replaced every few years, too — to make up an “orbital data center,” you’re just ensuring more business for your launch business. And I can’t stop myself from going back to that point.

Kirsten: I want to quickly say that other major companies (SpaceX) rent out their computers, by the way. So back to the chip conversation. We have come full circle.

Anthony: Another topic that may come up during this episode is an idea Talk your own book. This is not a new phenomenon. Executives at technology companies, or any company for that matter, what they predict for the future is ultimately the future that will be good for their business.

But I think it’s something that’s always worth remembering when we’re having these conversations about big AI companies, because it’s this moment of incredible uncertainty, and we’re all wondering: What will the job market look like in the future? What is the impact on the environment? What skills should I learn?

All these AI CEOs or AI investors, they all have ideas about that. This does not mean that they are wrong or intentionally misleading, but in each case, there is an asterisk to these predictions. In Musk’s case, he’s talking about something that could be very beneficial for SpaceX’s business. In SoftBank’s case, it is It invested very heavily in data center projects Here on earth. Sam Altman is the other notable figure His eyes rolled slightly On the idea of ​​an orbital data center – and again, clearly he and Elon Musk have done that A long and complicated history together.

All this means that there are no objective and neutral observers here. They’re all these people with baggage and huge amounts of money at stake.