Starcloud has completed a USD 170 million Series A funding round, valuing the space compute company at USD 1.1 billion and making it one of the fastest startups to reach unicorn status after graduating from Y Combinator. The funding round, led by Benchmark and EQT Ventures, closed 17 months after the company's demo day presentation.

The company has now raised a total of USD 200 million and launched its first satellite with an Nvidia H100 GPU in November 2025. This development represents growing interest in outsourcing data centers to orbit as resource and political obstacles slow their development on Earth, though the business model depends on unproven technology and significant capital expenditure.

Satellite Development and Launch Plans

Starcloud will launch a more powerful version, Starcloud 2, later this year with multiple GPUs, including an Nvidia Blackwell chip and an AWS server blade, as well as a bitcoin mining computer. The company will also begin developing a data center spacecraft designed to launch from Starship, the reusable heavy lift rocket being built by Elon Musk's SpaceX. Starcloud 3, as the spacecraft is named, will be a 200-kilowatt, three-ton spacecraft that fits the "PEZ dispenser" system SpaceX designed to deploy its Starlink satellites from Starship.

CEO and founder Philip Johnston said he expects that will be the first orbital data center that is cost-competitive with terrestrial data centers, with costs on the order of $.05 per kW/hour of power, if commercial launch costs land around $500 per kilogram. The challenge is that Starship isn't flying yet. Johnston says he expects commercial access to open up in 2028 and 2029. That's the reality facing all the big space data center projects: Powerful space computers will be cost-prohibitive until a new generation of rockets starts launching at a high operational cadence, something that might not happen until the 2030s. "If it ends up being delayed, we'll just carry on launching the smaller versions on Falcon 9," Johnston said. "We're not going to be competitive on energy costs until Starship is flying frequently."

Business Model and Market Strategy

Johnston explains that there are two business models for the company. One is selling processing power to other spacecraft in orbit; the company's first satellite, for example, analyzes data collected by Capella Space's radar spacecraft. Then, in the future, when launch costs go down, more powerful distributed data centers could potentially pull work from their terrestrial counterparts. Johnston argues that his company is well ahead of the competition, with the first terrestrial GPU deployed in orbit. It was used to train an AI model in orbit, a first according to Starcloud, and run a version of Gemini.

Beyond the performance, Johnston says Starcloud now has valuable data about what it takes to run a powerful chip in space. "An H100 is probably not the best chip for space, to be honest, but the reason we did it is we wanted to prove that we could run state-of-the-art terrestrial chips in space," he told TechCrunch. That hard-won knowledge —another GPU, an Nvidia A6000, failed during launch, will influence future designs.

Technical Challenges and Industry Context

There is a laundry list of technical challenges to be solved, including efficient power generation and cooling the hot-running chips. Starcloud-2 will have the largest deployable radiator flown on a private satellite; Johnston expects at least two additional versions of that spacecraft to head to orbit. Then there is the challenge of synchronization. The largest data center workloads, often for training, require hundreds or thousands of GPUs to work in tandem. Doing that in space will either require fantastically large spacecraft or powerful and reliable laser links between spacecraft flying in formation. Most companies working on this technology expect those workloads to come long after simpler inference tasks take place on orbit.

The nascent nature of this industry is highlighted by recent developments. When Nvidia CEO Jensen Huang unveiled the company's Vera Rubin Space-1 chip modules at his company's annual GPU Technology Conference last week, he didn't note that none had been produced or shared with the company's development partners. In fact, the number of advanced GPUs on orbit is numbered in the dozens, while Nvidia is estimated to have sold nearly 4 million to terrestrial hyperscalers in 2025. To put the scale in perspective, SpaceX's Starlink communications network, the largest satellite network in orbit with 10,000 spacecraft, produces something around 200 megawatts of energy, while data centers with more than 25 gigawatts of power are currently under construction in the U.S., according to Cushman and Wakefield.

Competitive Landscape

Besides Starcloud, Aetherflux, Google's Project Suncatcher, and Aethero, which launched Nvidia's first space-based Jetson GPU in 2025, are all developing space data center businesses. The elephant in the room is SpaceX itself, which has asked the U.S. government for permission to build and operate a million satellites for distributed computing in space. Going head-to-head with SpaceX is a daunting task for any entrepreneur, but Johnston sees room for coexistence. "They are building for a slightly different use case than us," he told TechCrunch. "They're mainly planning on serving Grok and Tesla workloads. It may be at some point that they offer a third-party cloud service, but what I think they are unlikely to do is what we're doing [as] an energy and infrastructure player."

Discover Latest Data Center Projects in the World with Ease

Are you seeking reliable, up-to-date insights into upcoming data center projects worldwide?

Explore the Global Project Tracking (GPT) platform by Blackridge Research, your go-to resource for the latest oil and gas projects and tenders across all stages:

• Upcoming Projects

• Tender Notices

• Contract Awards

• Projects Under Construction

• Completed Projects

Book a Free Demo today and see how the GPT platform can help you unlock opportunities and achieve your business goals.