Masayoshi Son, the billionaire founder and CEO of Japanese conglomerate SoftBank Group, doesn’t seem too convinced by Elon Musk’s plan to install 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 much more important than what could happen a decade from now,” Son said Tuesday when asked at an investor event if he plans to send data centers to space.
Son’s comments come just weeks after SpaceX finally arrived. Wall Street with a historic IPO That made it one of the most valuable companies in the world and made Musk the world’s first billionaire overnight.
However, SpaceX stock has already started to fluctuate after its big debut. The stock briefly fell below its opening price of $150 on Tuesday morning before recovering.
‘Whoever hits first wins’
Part of the reason SpaceX was able to pull off such a massive IPO is that the company is selling investors on completely absurd future earnings potential. At its IPO presentationThe company estimates it has a total addressable market of $28.5 trillion, with approximately $26.5 trillion expected to come from AI alone.
The rocket and satellite company, which acquired Musk’s artificial intelligence company xAI earlier this year and Cursor after its IPOHe is also selling another dream. Musk has said that SpaceX is working to put data centers in space.
Last year, Musk said he sees a path to putting 100 gigawatts of computing power into orbit each year with solar powered AI satellites.
And Musk is not the only rich technologist who thinks along those lines. Amazon founder Jeff Bezos predicted that humans could start building massive things data centers in space within the next two decades.
Still, Son doesn’t seem to have fallen for the hype. Son said the main benefit of placing data centers in space would be reduced electricity costs. But according to him, electricity only represents about a small fraction of the cost of running an AI data center, while the rest goes to chips, servers and other infrastructure. Space would also bring many new costs, including launching equipment from Earth and communications delays.
Son called Musk a “remarkable change agent” but said SoftBank will focus on building “formidable” data center capacity on Earth.
“Whoever hits 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 investing billions in OpenAI and it is part of the company’s plan Stargate Data Center Initiative. He’s also not the only one skeptical about putting data centers in space.
Morningstar analysts have warned that SpaceX’s initial public offering 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 computing market. But the company assigned only a 7% probability to that scenario.
