Orbital compute could cut a gigawatt's cost from $60B to $30B

Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

1. 24:52

   Yeah, so look, with Orbital, I think the key thing is two-stage reusability. And beyond that, rapid two-stage reusability. So today with Starship, they've shown that they can successfully re-land the booster. The second stage, we'll see what happens later this year. I think they're attempting to bring that back and then make it reusable by next year. But the thing that's important about two-stage reusability when it comes to the economics for Orbital Compute is the cost per kg comes down significantly.

2. 25:26

   We're talking about going from $1,500 per kg on Falcon, somewhere in that range, to $250 per kg, something lower. And the more that you can reuse the rocket, the more that price comes down. Because you're just depreciating the cost of the launch. And eventually you asymptote to the cost of the fuel. Assuming you can use a rocket for forever, Yes. Which will take a very long time for us to really achieve that. And at that point, we're talking about something well south of 250 per kg. So then you look at the specs of these AI satellites. Elon did a great... Yeah, that pod was incredible that he laid out the other day, the specs on the satellites. It was really great because I think they are finally showing people, here's how you could viably design one of these satellites and how heavy is the satellite.

3. 26:19

   How many could you fit into a Starship launch? And when you back into the numbers, you get to something like 5 megawatts of capacity per Starship launch. There's 100 metric tons in one of those Starships. So you can back into the math of how much will it cost per gigawatt to launch these satellites into space. Launch this compute into space. And the math that you get to before you account for things like bad GPUs, bad satellites, right?

4. 26:50

   These will all be things that happen. But the math you get to is it's about $5 billion per gigawatt of CapEx to put these in space. Right. For comparison, terrestrially, talk about the switch gears, the generators, the transformers, the shell, getting the power. that today is about $20 to $25 billion per gigawatt. So we're talking about a 5x reduction in cost on half of your bill of materials for the data center, which is a huge number.

5. 27:22

   Just very simply, just to say it, it costs $60 billion to put a gigawatt on the ground today. And we'll call it 35 of that are the GPUs and the silicon that's doing the training and the inference. and $25 billion is the land, the shell, the power, and the cooling, I would hypothesize that those elements are probably going to be inflationary, so that $25 billion may not go down, and because space, power, cooling are effectively free in space, and when I say space, I mean land, you know, there's no land in space, but there is space in space.

6. 27:59

   There's a lot of space. You're talking about putting a gigawatt into space for 30 billion and having lower operating costs. Now, for 60 billion, that's inflationary, and that 30 billion, that five, may be deflationary over time. But what we need to consider is the reliability and the maintenance. And so as long as, you know, everybody can do the math, but as long as these satellites in space aren't failing at an astronomical rate, the math, maths, and by the way, we know GPUs melt and lasers fail.

7. 28:39

   We know this happens in data centers, particularly during big training runs. Yeah, I mean, GPUs melt. So as long as the reliability and maintenance is not dramatically lower, the math is there once we have reusability and then rapid reusability for Starship v3. When you look at this, okay, so we went through Starlink and we said, okay, like it just stands to reason that we're going to have direct to sell on Starlink. Like the assumptions there are,