Masayoshi Son, the billionaire founder and CEO of Japanese conglomerate SoftBank Group, doesn’t seem too convinced by Elon Musk’s plan to put data centers in space.
Son said the costs of orbital data centers would likely outweigh the benefits and that the AI race will be decided much closer to home, Bloomberg reports.
“In the battle for AI, the next few years will be far more important than what might happen a decade or so from now,” said Son on Tuesday when asked at an investors event if he plans to send data centers into space.
Son’s comments come just weeks after SpaceX finally hit Wall Street with a historic IPO that turned it into one of the most valuable companies in the world and made Musk the world’s first trillionaire overnight.
However, SpaceX shares have already started to fluctuate after their huge debut. The stock briefly dipped below its opening-day price of $150 on Tuesday morning before rebounding.
‘He who strikes first wins’
Part of the reason SpaceX was able to pull off such a massive IPO is that the company is selling investors on a completely absurd future earnings potential. In its IPO filing, the company estimates it has a $28.5 trillion total addressable market, with roughly $26.5 trillion expected to come from AI alone.
The rocket and satellite company, which acquired Musk’s AI company xAI earlier this year and Cursor after its IPO, has also been selling another dream. Musk has said SpaceX is working toward putting data centers in space.
Last year, Musk said he sees a path to shooting 100 gigawatts of computing power into orbit each year with solar-powered AI satellites.
And Musk isn’t the only rich tech guy thinking along those lines. Amazon founder Jeff Bezos predicted that humans could start building massive data centers in space within the next two decades.
Still, Son does not appear to have fallen for the hype. Son said the main benefit of putting data centers in space would be lowering electricity costs. But according to him, electricity only makes up about a small fraction of the cost of operating an AI data center, while the rest goes toward chips, servers, and other infrastructure. Space would also come with plenty of new costs including launching equipment off Earth and dealing with communication delays.
Son called Musk a “remarkable agent of change,” but said SoftBank will focus on building “formidable” data center capacity on Earth.
“He who strikes first wins,” Son said.
Son isn’t the only one bearish on orbital data centers
For his part, Son is fully invested in the AI race here on Earth. SoftBank has committed to invest billions into OpenAI and is part of the company’s Stargate data center initiative. He is also not the only one skeptical about putting data centers in space.
Analysts at Morningstar have warned that SpaceX’s IPO was overvalued. In Morningstar’s best case scenario for SpaceX, the company could eventually use reusable rockets and orbital data centers to capture a significant share of the data center compute market. But the firm assigned that scenario just a 7% probability.
