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First thing every space company should do is book the first available launch they can.
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>> [laughter] >> Before they built the thing that they're going to >> Before they built the thing, before they probably even know what they're going to launch.
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Booking a launch is such a good forcing function for a space company.
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So, we founded the company January 1st, 2024.
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January 2nd, we booked the first available SpaceX rideshare launch.
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And we were like, "Okay, something is going to be on that rocket.
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I'm not sure 100% sure what it's going to be at this point, but something is going to be [laughter] on there."
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>> Sounds like the same advice for all the software companies.
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You just got to keep on launching and launching. Same thing.
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>> Welcome back to another episode of The Light Cone.
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Today, we're sitting down with Philip Johnston, the co-founder and CEO of Star Cloud.
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Star Cloud is building data centers in space to address the energy bottleneck that AI is creating here on Earth.
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Earlier this year, they raised $170 million led by Benchmark and became the fastest-growing unicorn in YC history, just 17 months after Demo Day.
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Philip, welcome to The Light Cone.
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>> Thanks so much for having me.
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>> So, to start off, why data centers in space?
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>> So, we are very quickly running up on constraints on where we can build new energy projects terrestrially.
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And so, by building them in space, we get access to this almost unlimited low-cost energy in the form of solar.
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Um of course, there's other costs like the cost of launch and the cost of launch is actually very rapidly trending down, you know, with new launch vehicles coming online, the Falcon 9 program, and and Starship on the horizon.
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Um and so, that's the reason we're building data centers in space.
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>> How did you come up with the idea?
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It's not sort of like the typical idea that if you're um people come up with.
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[laughter] >> I'd actually been working uh I was with McKinsey for a few years working with the space agencies of different governments, and I could see that the launch cost was very rapidly trending down.
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And actually in early 2023, I decided randomly on a weekend to take a trip down Starbase Texas where they're building the Starship launch program even before the first launch and not many people were paying attention back then and I could see that they were just building a enormous capacity.
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So they're building these two Starship gigafactories that are designed to produce something like three Starships per day and because Starship is reusable you know, on a sort of three or four year timeframe that could lead to us having thousands of times the capacity to get things to space.
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And so I started thinking okay let's just run the clock forward.
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If the launch cost was 10 times lower than it is today and the launch capacity was maybe a thousand times more than we have today what would make sense that that currently doesn't make sense?
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And so I started thinking about some of the concepts from sci-fi that I remember as a kid, you know, like space-based solar where you have these huge solar panels in space.
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You beam that power down.
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And essentially yeah, just reached out to to a few folks and you know, I knew in space industry and got connected with a few others and started you know, ideating on okay, what what what what would make sense if the launch cost was much lower than it is today.
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>> I'm curious, are there any other ideas that occurred to you during this process when you were like thinking of like what what people could build in space? >> Yeah, tons.
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I mean we we definitely looked at manufacturing in space and there's Varda.
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We looked at asteroid mining and you know, I would say YC has Astro Forge.
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We looked at space hotels.
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We looked at basically anything where which could make sense if the launch cost was a lot lower than it is today.
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>> And how come data centers was the best choice?
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>> Data centers makes a lot of sense to be the first thing you do because you don't need to re-enter a product.
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So with things like um asteroid mining or with um manufacturing in space or space hotels they require this very expensive re-entry process.
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Initially what we actually started doing with space-based solar.
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So huge solar panels and then you beam that power down and it's it's a concept from I think like the 60s even Asimov in the 40s was writing about it.
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The problem with space-based solar is you actually lose 95% of the energy in transmission from space to earth.
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And so for the first two months of the company that was literally what we were doing.
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We were called Lumen Orbit because of that that reason, luminosity and orbit and orbit.
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We were thinking, "Okay, once we get that power down, what are we going to be using it for?"
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And even back in '23, most new energy projects were being built for data centers.
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So, we were like, "Okay, well, either directly or indirectly, this power is going to go into data centers.
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Let's rerun those numbers."
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So, initially we'd run the numbers to know what's the launch cost break even that makes sense for space-based solar, and we'd come to a number of like $50 a kilo.
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So, then we rerun the calculations, we were like, "Okay, let's spend a month figuring out what would the launch cost break even need to be to make data centers in space break even."
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And we came to a much closer to reality number of $500 a kilo, and that's what we think currently that the break even launch cost is.
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Um and so, then we rapidly pivoted the company towards that.
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>> [laughter] >> So, Philip, you launched Star Cloud 1 in November of 2025, uh and that was a real emotional moment.
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Like, can you walk us through what that was like?
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>> Yeah, I mean, it was incredible.
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So, just tell people a bit about Star Cloud 1.
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So, we'd set this launch date, um you know, 18 months in the future, and we initially started with something quite unimpressive.
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Um like, we were going to fly some Nvidia Jetsons chips.
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They've been flown into space before, and we were going to try and do some new new workloads on there.
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Um yeah, so it was Addy that came on and said, "No, we need to do something way way cooler than that."
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And we actually ended up putting five GPUs on there, two three from Nvidia, two from ARM.
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Um but the most interesting one was this Nvidia H100.
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We did some crazy things.
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Like, for example, you have to put it through thermal cycling.
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Um and we didn't have time to we like book the the vacuum chamber, the thermal and vacuum chamber.
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And but we needed to know, okay, if we heat up this phase change material and cool it down, heat it up and cool it down, is it going to crack anything? And so, at like 5:00 a. m.
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the day we had to ship it down, we were working through the night.
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Addy and Ezra are doing like dunking this thing in an ice bath to cool it down. >> Oh my god.
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[laughter] >> And then we pull it out of the ice bath, and I'm like, "Are you sure it's going to fire me the electronics?"
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They're like, "Don't worry about it. It's totally fine."
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They pulled out of the ice bath.
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Then we had these like like hair dryers to heat it up and melt the wax. >> Yeah.
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>> Like or like uh hot air guns.
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And then we're dunking it back in the ice bath.
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[laughter] I It is a miracle that it works, to be honest.
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>> You can just do things.
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>> You can just do things.
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Yeah, this So this is the kind of thing you can do as a startup.
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Because we actually had a quote from one of the primes on what it would cost to do Starlink one and they said 75 million to 100 million dollars.
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And we did the whole Starlink two including the launch for 2 million dollars. Yeah.
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So yeah, leading up to the to the launch I mean, we we got the most incredible separation video.
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I think we're going to play it now.
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>> Starlink one separation confirmed.
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>> So half the time as it deploys it will be behind the shadow of the Earth and you don't see anything.
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The other half of the time it will deploy not into the silhouette of the Earth.
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And so I mean, it just is the most perfect uh like deployment video I've ever seen.
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And this was played by Jensen as he walked on stage at the GTC conference this year this five-story tall like uh screen behind him playing the Starlink one separation video. >> Amazing.
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[clears throat] >> Um so no, it was the most incredible feeling seeing this uh deploy.
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>> Where was the team for this?
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Did you all like do >> the whole team down.
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Yeah, there was only uh 12 in the team at the time of Starlink one launch.
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So we took the whole team to Florida.
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And we had like 100 friends and family, investors.
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We Some of our team brought their family and kids down and like it was a real nice uh really nice day.
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We're going to release a a behind-the-scenes video of some of the like family moments in that uh launch.
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>> How long was it from like when the rocket lifted off until the thing deployed until you powered it up and were able to verify the thing actually worked?
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>> Yeah, so it lifted off.
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We were all on what they call the banana bleachers.
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It's like the famous from the Apollo era.
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But it was in the middle of the night.
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So it lifted off at around midnight and then at 1:00 a. m.
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they closed the bleachers and everyone had to get on a bus and leave.
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And we're like, "Oh I thought we were going to like be able to watch the deployment."
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And then I'm sitting in the back of a cab, like watching a live feed on spacex.
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com [laughter] literally.
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I was like, "Oh my god, it's the plane.
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I can't believe it's the plane."
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Um and then it took about 12 hours to make first contact, which is not bad actually.
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It usually takes at least 24 hours to get first contact.
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And then it's like a 2-week commissioning period and we had a whole bunch of software issues we had to work through.
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Um like it kept the whole satellite kept restarting every 2 hours.
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And what was happening was one of 20 different um like failure uh like triggers was triggering.
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And we didn't know which one it was.
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And we can only get a ground station pass every like at least every hour and a half, maybe longer.
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And so you we had to manually turn off each one, turn back on everything else, and wait for a ground station pass to know which one it was.
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So that took like you know, that took like 3 days just to figure out that software issue.
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And then yeah, 2 weeks after that then we started commissioning and turning on all the different payloads.
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And then we trained the first model, ran the first version of Gemini, we did the first fine-tuning of the model on you know, all of that.
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Um did the first high-powered inference on on satellite imagery and all this kind of stuff.
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>> So Star Cloud 1 right now as we speak is just left Chinese airspace, I think.
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>> Yeah, it's heading for Japan yeah.
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>> [laughter] >> It's going quite fast actually.
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>> Yeah, so it travels around 17,000 miles an hour.
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It's uh it's it's about an hour and a half to do one circumnavigation.
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>> So I mean, by Star Cloud 4 or so, this won't be like one, it'll be a giant network sort of covering the Earth actually.
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>> Yeah, from Star Cloud 3 onwards we'll have 88,000 and they'll all fly This one is what in what they call mid-inclination orbit, so it doesn't go over the poles.
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Um Star Cloud And and that's another point here on how janky this one is.
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It doesn't even fly in the right orbit, but at least it in it it uh enables us to test the hardware.
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Um the next one will fly over the poles and that gives us 24-hour always in the sun.
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>> In order to do that, you need to put thrusters on the satellite to move it into that orbit.
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>> In the end state we'll be deployed in that orbit, but you need thrusters anyway to maintain the orbit cuz you have you know, drag from the upper atmosphere there.
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>> What are the engineering and physics trade-offs you have to make this happen?
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Because what you basically are doing with Star Cloud is you're getting infinite energy because the sun is basically the natural fusion reactors is a giant mass that generates a nuclear reaction with the giant mass and you have infinite energy, basically abundant and lots of space.
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But as a result of that, which we we're constrained of that in Earth, you have a bunch of other really hard problems to solve like things around interconnect.
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How do you send all the data back and forth back to Earth?
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How do you handle cooling?
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People think that space is cold, but actually there's no unlike Earth, there's no air to circulate it back.
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So you need some crazy solution with cooling.
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There's things around radiation to flip the bits in in in processors.
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And there's probably other things around how do get the solar panels to become really big and expand. And many more.
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I mean, these are the ones that I could think of.
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I mean, what are There's like so many things that are just so hard to build.
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>> Yeah, you are correct.
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There are many engineering challenges to to to be solved.
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The two biggest ones that are outstanding and most of our engineering our engineering team is split basically 50/50 down these two lines is number one as you mentioned, how do you get rid of this heat in a vacuum?
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And then number two, how do we make the chips work in a higher radiation environment?
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Some of the other problems are being solved by other people.
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You know, the interconnect, we've just signed a contract with SpaceX for our next 20 satellites to have a Starlink laser terminal.
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That gives us very high bandwidth low latency connectivity.
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Other people are solving some other parts of this.
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The the core ones we're solving are that.
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And so for the first one, for the thermal management side of things, um we are building a very large, low-cost, and low-mass deployable radiator.
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Now, radiators in space are are not new.
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It's not a a physics um you know, solution.
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It's it's more of a manufacturing and engineering challenge cuz the you know, the International Space Station has had a radiator which dissipates, you know, lots of heat already. Very similar mechanism.
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So, uh, a liquid cooled loop.
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The challenge with it is making it cheaper and lighter.
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So, our radiators at least 10 times less mass per watt of dissipation than the ISS radiator.
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And 500 times less cost per watt of dissipation than the ISS radiator.
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It's a very low bench very easy benchmark to beat on cost for the ISS, but Um, yeah, and then on radiation it's just a lot of ground testing in different particle accelerators.
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So, we've done um, several rounds of testing at the Brookhaven National Lab particle accelerator for heavy ions.
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And also at the there's a cyclotron for high velocity protons down in Knoxville.
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So, we ship all of our hardware down there.
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My co-founder Addy runs in and out wearing this protective thing.
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>> [laughter] >> Addy is a lunatic when he has to do this stuff.
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He's like, "Oh, yes, it's the same as flying transatlantic.
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Don't worry about the radiation."
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>> [laughter] >> So, yeah, basically you expose it over a 24-hour period to the same radiation dose that you would have in a 5-year mission.
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And then that all of that telemetry and data then informs our choice on both shielding and software to mitigate bit flips.
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I think we're the only people in the world now that know where both an H100, a B200, H200 will fail if you blast it with high velocity protons and heavy ions.
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>> Do you have to change any of the underlying electronics to solve the problem or you just build shielding around it? >> Uh, both. Both.
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So, we do build shielding around it.
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Um, There's a lot of it is just component selection.
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So, for example, all of the SSDs, all of the power delivery system, all of the power converters and everything else, we we test 10 components and whichever the best one is, we pick.
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We're trying not to use space grade rad hard uh, components.
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We're trying to use off-the-shelf like automotive style components because it's way cheaper.
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And most people have never tested those in radiation chambers.
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>> I think this is one of the secrets of uh, how Space X has actually reduced a lot of the cost of uh, a lot of the satellites as well.
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They use not space-graded electronics, which would be exorbitantly very expensive, but instead you take a regular components that there's a supply chain and run through all the tests and make sure if it works.
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And I think actually this is uh one of the things that Stratus does as well.
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It's to make sure that telecommunication satellites actually work in space because they're they're also in um in GEO, which has more radiation. Are you in GEO as well?
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>> No, we're we're in LEO. >> Okay.
13:55
>> When you first told people that you were going to put data centers in space, what were people's reactions?
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>> [laughter] >> Uh for a very long time the reactions was uh this is the dumbest thing I've ever heard.
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>> [laughter] >> Um So, the yeah, we we tried to we actually applied to YC once and we got rejected.
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We we then tried to raise and it took we tried to raise 2 million at 10 posts on a SAFE.
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It took us 3 months and we got rejected from at least 100 VCs.
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And then even after YC um when we went out to raise after demo day, I think we got rejected from at least 20 VCs before we got to the first uh the first check.
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>> Was one of these ideas that was like extremely unpopular with investors and if you had believed the if you had listened to what all the investors were telling you, you would have quit and not ever done this idea?
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I'm curious, why did people tell you that they were not investing and what did they get wrong?
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>> People had a hard time visualizing a world with low-cost launch.
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And and to be fair, we're still not out of the woods on that front.
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Um you know, lots of things need to go right with the Starship program for that to make sense.
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So, that that's one thing.
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I think it just sounds too sci-fi and too Yeah, it's a to make this work, there's a convergence of two factors.
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One is um the launch cost coming down and people have to believe that.
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The second is it becoming way harder to build stuff terrestrially.
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Maybe 2 years ago that wasn't quite as obvious as it is today.
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Now people are like, "Okay, well, they've just banned building new data centers in New York.
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They're going to ban it in like seven other states."
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Now that those two things I think converge to make it more investable essentially.
15:26
>> And I think the other thing after hearing you explain all the engineering and physics, it actually is doable.
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It doesn't sound like sci-fi from first principles.
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It's like it's actually buildable.
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>> The reason I had confidence in it um is because we had such a strong engineering team.
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So, if you if you have you know, the world's best space engineers saying this is possible and to be frank, my background isn't uh as a space engineer.
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But it uh you know, I I I have full confidence in my my two co-founders.
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One from SpaceX, the other was building satellites for NASA saying it's possible then, you know, that's a that's a it's good enough for me.
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>> [laughter] >> Once you had the idea and then as you went through in YC, how did you sort of break the problem down into like a a plan for what to do?
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I was in software it's you think of your MVP and you launch quickly and you get feedback, but hard to do that with data centers in space.
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>> [laughter] >> I have a very tangible piece of advice for all space companies.
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The first thing every space company should do is book the first available launch they can.
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>> Before they built the thing that they're going to launch.
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>> Before they built the thing, before they probably even know what they're going to launch.
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Booking a launch is such a good forcing function for a space company.
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Um so, we founded the company January 1st, 2024.
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January 2nd, we booked the first available SpaceX rideshare uh launch and it was cheap as like 300 grand, you know, and we we >> Which was how far out was the launch?
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>> Uh it was 18 months out and then it got pushed to 21 months out.
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And we were like, okay, something is going to be on that rocket.
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I'm not sure 100% sure what it's going to be at this point, but something is going to be on there.
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>> [laughter] >> Oh, that's interesting.
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>> Sounds like the same advice for all the software companies.
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Just got to keep launching and launching. Same thing.
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>> [laughter] >> And what what we initially planned to launch was very unimpressive actually.
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It was like we were going to put a Jetson chip which has been flown on many satellites before and we were going to use it for for kind of edge processing and things.
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We actually had a co-founder change quite early on and when we got Addy from SpaceX, Addy was like, "Oh, that's that's lame.
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Like, let's let's put an H100 on there."
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We're like, "Addy, you can't put H100 on a on a satellite."
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He's like, "Sure you can."
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>> [laughter] >> The amount of people who said it was physically impossible to run a like a a chip that's that power dense um in orbit.
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Like, people just thought it was like literally impossible to run data center grade, you know, GPUs on orbit.
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>> What would have caused it to be impossible? >> There's two things.
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One is the thermal side of things.
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Like, they have very power dense, they produce a lot of heat.
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And the second is they'd never been tested in the radiation environment of space.
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Um and both of those So, for the first one, like, it's kind of a wacky solution.
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Like, we submerge the entire thing in this phase change material.
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So, everything on Starlight 1 is is submerged in this um like phase change material.
18:04
So, it's like immersion cooling for all of the components, all of the power delivery, memory, everything is submerged.
18:09
Um like, nobody's ever considered doing anything like that in space before.
18:13
It It's not a particularly scalable solution.
18:16
It's not like you you have quite a low duty cycle.
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You have to wait for it to melt and then and then um and then it solidifies every so often.
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But, it enables us to prove that you can run the H100 in space.
18:27
The The next one is this direct-to-chip liquid cooling architecture that we can run continuously.
18:30
Um but yeah, I mean, I I give full credit to my co-founder Addy for coming up with some pretty wacky and crazy ideas.
18:37
>> To get to a data center that's like commercial scale where you can actually like make money on it.
18:41
It's actually like profitable.
18:43
It's going to require many steps.
18:45
How did you like think about like sequencing out like the journey to get there?
18:49
>> So, as I say, first step was book whatever the like first launch lowest MVP we can have uh available.
18:53
Second step is producing something which is a like a a product we can sell to customers. So, that's Starlight 2.
19:02
That's a 10 kW spacecraft that we can sell compute to government and military satellites.
19:06
And then the third step is the product that we're going to be able to sell to hyperscale uh data centers.
19:12
So, that's the Starlink 3.
19:14
We can it's 200 kW 3-ton spacecraft that's 6 m long.
19:18
With that, we can fit 50 of them per Starship.
19:20
So, about 10 MW of new compute capacity per Starship.
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And we've just filed with the FCC for a constellation of 88,000 of those.
19:28
So, that means on the order of 20 GW of new compute capacity. >> Wow.
19:32
>> And we can fit up to 10 TW uh in the dawn-dusk sun-synchronous orbit.
19:35
So, that's like 20 times the entire US power grid.
19:39
>> For context, what's the largest uh data center deployment on Earth because you're talking about 22 GW? Oh my god.
19:45
What's What's the largest one here on Earth today?
19:48
>> Uh they're about a gigawatt is the is the largest. Yeah.
19:51
>> What's the timetable for all of this to become real?
19:53
>> So, yeah, it's very dependent on the launch cost.
19:55
And so, um you know, this this estimates for Starship if you believe Elon, it'll be end of this year, but let's say uh could be end of next year, early 2028 for Starship uh deploying uh you know, ramping up the launch cadence.
20:10
They're actually phasing out Falcon 9.
20:12
So, um they're going to be moving over commercial customers to Starship.
20:15
There's also a whole bunch of other launch vehicles coming online.
20:17
Stoke Space has the Nova rocket. Rocket Lab has Neutron.
20:20
Blue Glenn uh Blue Origin has New Glenn.
20:23
So, end of 2028, I'd say, is when we're starting to ramp up for the terrestrial business, competing with terrestrial data centers.
20:31
>> So, your customers are actually anyone who wants compute.
20:32
And then initially >> Initially, it's government and military.
20:36
But then as Starship ramps up, so for the next 2-3 years, we're We've just won four contracts with various DoD and government entities.
20:45
>> And then initially also um it's people who want that compute actually like for other purposes in space then. Is that right? >> Yeah, exactly.
20:52
So, right now, many satellites are very constrained with the amount of data they can downlink.
20:55
And so, using optical terminals, we'll have three optical terminals on our second satellite.
21:00
They can ship enormous amounts of raw satellite imagery um and SAR data, synthetic aperture radar data to us.
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We then process that on orbit and then we can just down link very quickly the insight from that.
21:11
And the insight might be the coordinates of a vessel or something like that.
21:16
>> In terms of Nvidia, I mean, are you how are you partnering with them around chip design and you know, are there changes that you have to make to the design to I mean, as you reach scale like being making it more radiation resistant or you know, what does that look like?
21:31
>> Yeah, so we're we're working very closely with Nvidia.
21:33
Um they we recently announced this uh Rubin space Rubin one chip that we're working with them on.
21:39
Uh so, that's designed for us in the space environment.
21:42
We very heavily modified the H100 to make it work in space.
21:45
So, on the mass side of things we stripped out a lot of things like the um AC to DC converters, the um the direct the uh cold plates and everything else we stripped out and then we stiffened the board and made it radiation tolerant.
21:58
So, because of that we they they're very interested in you know, whether any people basically that have any data on how one of these high-powered GPUs operates in space.
22:08
Um so, yeah, we're working with them very closely on um designing this new space chip.
22:11
Cuz you you can actually do very simple things to make these chips way more effectively effective to run in space and so, that's what we're doing.
22:19
>> YC's next batch is now taking applications. Got a startup in you? Apply at ycombinator. com/apply.
22:26
It's never too early and filling out the app will level up your idea. Okay, back to the video.
22:32
>> I think the thing of getting GPUs to now natively run on DC, you avoid the whole conversion of energy AC DC because that's what makes solar panels not as efficient.
22:43
It's the whole conversion. >> Exactly.
22:45
And all our solar panels immediately.
22:46
So, there's no point doing we we just need DC to DC converters.
22:53
Um but that's much better than AC to DC converters.
22:56
>> So, it could unlock a bunch of companies also just building GPU data centers just using solar power, period.
23:02
Whether in space, under the water, or on Earth.
23:05
>> Yeah, I mean, yeah, actually people can definitely use this tech for other things, yeah.
23:09
>> Can you talk about Star Cloud 2 a little bit more?
23:10
Like, is there actually a Bitcoin miner in there as well?
23:14
>> [laughter] >> Yes, we will be flying a Bitcoin mining ASIC next next year, which the crypto community is very excited about.
23:19
There's much more enthusiasm than I was expecting, to be honest about that, so.
23:24
>> [laughter] >> The community loves a good narrative.
23:28
>> The number of people that want me to launch >> Star Coin, you have no idea.
23:31
>> [laughter] >> There is actually a Star Cloud meme coin, I think, out there. >> Yeah, don't buy it.
23:36
>> [laughter] >> That's not official.
23:38
>> Do not buy the Star Cloud meme coin. >> Yeah, yeah.
23:41
>> So, yeah, we'll we'll we'll be we'll be launching we'll be we'll have one of those on there.
23:43
Um we'll have a whole bunch more H100s, Blackrock chip.
23:49
Um we're also partnering with AWS on launching the Outpost hardware that's their on-premises server blade that they give to customers to run a local instance of EC2.
23:56
And that'll be useful for, particularly for our military customers.
24:00
>> Something we were talking about uh at YC, we just observed over the last few years it's been quite hard for hard tech companies to raise funding in general.
24:09
There's not been much investor appetite for it.
24:10
It certainly seems to have changed over the last 6 months.
24:15
>> From your perspective, I'm curious here, like, how was it raising the seed round in during sort of during YC and then this huge round you raised from um from Benchmark?
24:23
Just sort of maybe tell us the inside story of kind of how that all came together and and what it feels like being a hard tech founder raising money today.
24:32
>> So, when we first raised uh end of 2023, we tried to raise $2 million at 10 post and yeah, that took 3 months to get together. About 100 VCs said no.
24:39
Yeah, deep tech and hard tech and space were definitely not a cool thing to invest in back then.
24:45
Um then, after YC, yeah, we we it took us quite a while to raise, so I think we got rejected from at least 20 VCs before we got our first uh first check on the demo day raise.
24:55
And things have definitely swung around since then.
24:57
Um it's become a lot uh easier to raise for I think a number of reasons for that.
25:05
One is people think that the software doesn't have a moat anymore, which I think is probably accurate.
25:11
>> That sort of high It's funny like the high of mind just switched like seemed to me like very quickly.
25:14
It was just like the SaaS stocks like Cloud Code came out, SaaS stocks public company stocks all went down, and then suddenly it like was a I I think the like fastest I've seen sort of things in the public markets like directly affect DemoDay where suddenly everyone's like, "Oh, like we need to like invest in hard tech now."
25:30
>> Yeah, that's that's fascinating, yeah.
25:30
I think yeah, people are just much more open to investing in hard tech now.
25:34
Yeah, like I think [clears throat] we were the first space investment Benchmark have done.
25:37
>> Yeah, I mean whatever you can share like how did that round kind of come together and um and again what do you think sort of Benchmark saw in saw in you guys?
25:45
>> So, to be frank, that round wasn't as easy as it looks from the outside.
25:47
Um there's a lot of VCs that have big SpaceX positions for one thing.
25:51
And SpaceX like midway through the round came out saying they're doing exactly what we're doing, and it wasn't public then.
25:58
And so anybody with like a conflict policy then was like, "Okay, we're conflicted out."
26:04
Um but now I mean it was the end of the round it it suddenly kind of came together much faster.
26:07
Um I think >> [snorts] >> to be frank, I don't think so Chethan is our partner. Chethan's awesome.
26:13
Um >> Amazing, that's true.
26:16
>> Yeah, he's he's great.
26:16
I think basically he saw a really really strong technical team doing something that if it worked could be incredible.
26:25
And I think when he came to visit us, you know, he spent a lot of time doing DD on other things, you know, on the backgrounds of all of our We've got the best We literally have the best freaking engineering team in the world in Redmond building the stuff.
26:37
You know, half of them from SpaceX, other half from from some of the hyperscalers.
26:40
Um so he spent a lot of time with the team. He spent a lot of time.
26:43
Um but I I I don't think if he'd I don't think if he'd come across a report that said that cooling in space was impossible that that would have like thrown him off.
26:52
I think he was like, okay, this is a good enough team that they can figure it out.
26:57
>> How did you build such an awesome team?
26:59
>> So, my co-founders, Adi and Ezra, um I well, with Ezra, I I reached out to him after I'd been down to Starbase, Texas, and I was like, have you got any ideas that would make money if uh launch costs were 10x cheaper than it is today?
27:11
And we started with the space-based solar idea.
27:12
Um with Adi, who was introduced to through a friend through a friend, and he he actually had already been thinking about this.
27:19
Um he already had registered the domain name stellacloud. com before.
27:21
And then with the team, we were just ruthlessly slow at hiring.
27:28
Uh and like picky about hiring.
27:30
After YC, we'd raised uh like 11 million at 40, which is like a decent round in YC.
27:34
And even then, it took us 6 months to make our first hire.
27:37
Um and we got like the most kickass space engineer as our first hire.
27:42
We've raised like a lot of money now.
27:44
Even this round that we announced in March, we've raised a much larger round since then.
27:48
We're still only 20 engineers.
27:51
Like the And we have one commercial guy who came from the Space Force who was working on Golden Dome.
27:56
Um we are so picky about who we hire.
27:59
Like it is to a point of being very frustrating, to be honest, but it's the whole game. It's the whole game.
28:03
It's having an a kickass engineering team.
28:07
>> What was it like to have this idea, have people sort of poopoo it, like didn't really get it, and then suddenly, I mean, to have much more commercial validation that like you know, Google, um SpaceX, the the stalwarts of the industry sort of embraced the idea and realized actually like some crazy percentage of future data centers likely are going to be in space.
28:30
What was that like to sort of see the the sea change and be early? >> It was surreal.
28:34
So, if you go back through my Twitter feed, I've been like shouting from the rooftops for the last like 3 years about this.
28:42
>> And you're trying, [laughter] but right.
28:43
>> Every day I would post something about like why data centers in space are going to be are going to make sense.
28:48
And then slowly and slowly and slowly people would start to drop hints about things like Elon at one point was like 99.
28:58
999% of the energy in the in the solar system is is is from the sun.
29:02
So I'd repost that and be like we need to build data centers in space.
29:06
>> [laughter] >> Like I would like everything I would find a hook for like [laughter] >> I think this is one of the things we see with all the best hard tech founders.
29:17
You're essentially living in the future and are almost like a prophet that brings the future back to now us underlings in the earth that don't quite get it yet.
29:26
>> to tell my mom who's very religious that YC said I'm a prophet.
29:29
>> [laughter] >> But I think that's cool.
29:31
I mean the other thing that's fascinating to me is that your background if you go on your LinkedIn is not very legible that you would be in space.
29:40
But you have a background previously doing software and physics and then went to business but nothing there that said space. >> Yeah.
29:52
So for people who don't know my background spent the first five years of my career as a an engineer on the software side studied math and physics before that.
30:00
Undergrad and masters and then I went to McKinsey more on the commercial product side.
30:05
But I actually ended up doing a couple of projects with national space agencies on different satellite missions and that's where I really started to notice the launch cost coming down very rapidly.
30:14
I actually had another startup before this and yeah when I left that one decided okay if I'm going to do another startup has to be something I'm like very passionate about and and for my whole life I've been very passionate about space.
30:29
Because I don't have a space engineering background realized okay I'm going to need the world's most kick-ass space engineers.
30:35
And actually this is where I give credit to YC.
30:36
I was kind of blindly following the YC advice.
30:38
I was like okay the first First need to do before coming up with an idea is get the most incredible space engineers in the world um on the team essentially.
30:48
>> This is before you even knew what you wanted to do in space.
30:50
All All you knew at that point was that like launch costs were going to come down dramatically and there was going to be cool stuff to do in space.
30:56
And you wanted to find some space people to do it with.
30:59
>> Yes, literally that's literally it.
31:01
>> [laughter] >> But it wasn't a vibe of like, "Oh, can you please build this crazy idea that I have?"
31:06
It's like the reverse even like I'm going to figure out the commercial part. >> Yeah, exactly.
31:10
My pitch to Adi and Ezra was essentially, if you have any ideas that would make sense if the launch cost was 10x less than it is today, um I can figure out everything else around that besides the building the satellite piece.
31:26
>> How did you How did you find them?
31:26
How did you recruit them?
31:28
>> Uh so Ezra and I had grown up in the same place in the UK.
31:30
I didn't Actually, to be frank, I messaged like a a lot of space engineers.
31:34
Maybe 10 of them took a call and two of them said yes.
31:38
>> [laughter] >> All you need.
31:39
You don't need like 100 people to do it.
31:41
You only need one or two.
31:44
>> So Philip, during the batch, the way I thought about Starcloud was that it could only work if you were able to make it cheaper per unit of compute than like ground-based compute.
31:52
And I think you will, but it's occurred to me since then that like it's not actually clear to me anymore that that is necessary for Starcloud to succeed.
32:00
I'm curious if you think about it the same way because since the batch, we've learned that AI data centers are becoming politically incredibly unpopular.
32:08
And it seems not unlikely to me that it will soon become like basically de facto impossible to build AI data centers like anywhere um at least in like a democratically elected country.
32:19
Like I'm curious like how you think about that, how it affects your plans for the company.
32:24
>> Yeah, 100% and this has moved faster than I was expecting as well to be honest.
32:28
Uh you know, we've just seen New York now blocking data centers construction.
32:33
Um you know, for reasons which are are grounded in science really.
32:35
Uh you know, it it seems like more more like vibes than anything else.
32:40
Building these things in space will definitely be much easier from a regulatory perspective.
32:45
>> So, let's do some myth-busting.
32:48
Um you know, there are a lot of misconceptions about certainly water in data centers, but also power.
32:52
You know, what are some of the things that come to your mind?
32:58
>> With water specifically, um water is really actually just a function of power.
33:03
You know, you can cool data centers with no daily consumptive use of water if you're if you just throw more power at the problem, essentially.
33:11
And that is what all of the data center companies are now proposing.
33:14
It's very unlikely that any data center company proposes any um any any data center that is going to be consuming daily amounts of water.
33:22
>> And there is actually uh evidence that you can have closed-loop systems that consume very little water.
33:26
And uh I think the analogy is like if you ran a burger shop, like a fairly large data center with like hundreds of megawatts would consume about the same amount of water as like a McDonald's. >> Yeah.
33:42
>> So, it's like it's really, you know, a non-issue, but it's unbelievable that they're repeating this so much. >> Yeah. Yeah.
33:48
They do use a lot of power, though.
33:48
And so, most new power projects for data centers right now are being built with natural gas generators, actually.
33:54
And so, there's certainly some people that are pushing back on on those.
33:58
>> I mean, you know, one of the arguments is that as data centers get built, they sort of compete on the grid, which is kind of not true.
34:05
I mean, people actually build >> if you if you build a new power project for it.
34:10
>> Right, which is generally what people are doing.
34:11
You just can't get enough power from the grid, so >> Yeah.
34:15
>> There's also some evidence, actually, um that adding data centers um increases the capacity of the grid, and then prices actually come down over time.
34:24
That being said, you know, it's sort of a perfect storm.
34:26
Like we need intelligence, we need data centers.
34:28
It's become basically a national security issue.
34:32
You know, um for America and for the West to have access to intelligence is sort of the most important tech tree of the next hundred years.
34:41
And so for tech policy to sort of put us back into the Stone Age and possibly lose the war for us.
34:48
That puts Starcloud in a different position in terms of bringing compute and AI and power online. >> Yeah, for sure.
34:57
Definitely puts us squarely in the national security bucket at that point.
35:03
>> I mean, thank you so much for fighting for the West then.
35:07
>> [laughter] >> We're doing our best.
35:09
>> So as one of the fastest growing unicorns in YC history and to do it as a hardware company, do you have any closing thoughts for people who are you know, looking at space, looking at hard tech as a thing that they want to work on like you know, what have you learned and what would you tell the you know, just starting out version of yourself based on where you're at now?
35:28
>> Yeah, I mean I think there's just huge opportunities now coming in with space.
35:32
We're really at the like very early innings with what's going to be this enormous industry in space.
35:38
You know, the amount of capacity and launch that's going to come online in the next five years is is really mind-boggling.
35:42
So yeah, I would definitely encourage people to to step into that.
35:46
In terms of advice like the the YC advice stands true.
35:49
It's technical talent and founding team is the thing you need to solve for first and then everything else follows from there.
35:57
>> Philip, thanks so much for coming on the Late Cone.
35:59
>> Yeah, thanks so much for having me on this being here.