# Orbital data centers get cheaper below $500 per kilo

Markdown copy of https://realalpha.app/s/orbital-data-centers-get-cheaper-below-500-per-kilo/ on Real Alpha, the best minutes from long interviews with the people building AI. Cite and link the page, not this copy.

- Speaker: [Philip Johnston](https://realalpha.app/builders/philip-johnston/) · Co-Founder & CEO, Starcloud · Building Starcloud’s space-based data centers to scale AI compute beyond terrestrial constraints.
- Host: [Molly O'Shea](https://realalpha.app/people/molly-oshea/) · Founder, Sourcery · Ex-Upfront Ventures investor; has interviewed Alex Karp and Palmer Luckey.
- Show: Sourcery
- Episode: [Nvidia GPUs in Orbit: Inside Starcloud’s $2B Factory](https://realalpha.app/v/mdq6urSx-f8/), Oct 31, 2026
- Moment: 31:37 to 33:59 of the episode (2 min), playing on https://realalpha.app/s/orbital-data-centers-get-cheaper-below-500-per-kilo/; the episode from there: https://realalpha.app/v/mdq6urSx-f8/?t=1897

## Quote

> “in space number one **we don't need permitted land** so your biggest cost is gone we don't need batteries and backup power because they're 24-7 in the Sun”
> — [Philip Johnston](https://realalpha.app/builders/philip-johnston/) at [32:37](https://realalpha.app/v/mdq6urSx-f8/?t=1957) · Sourcery

## Takeaways

1. No permitted land or battery backup is needed in orbit.
2. Space solar panels produce about eight times more energy per area.
3. Below roughly $500 per kilo, orbital infrastructure can be cheaper.

## About this segment

Philip Johnston compares space solar power with terrestrial data centers and says launch cost is the deciding factor. His estimate gives a concrete threshold for when orbital compute can compete.

From “Nvidia GPUs in Orbit: Inside Starcloud’s $2B Factory”, Oct 31, 2026. [Watch the full episode](https://realalpha.app/v/mdq6urSx-f8/)

## Transcript

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

[31:47](https://realalpha.app/v/mdq6urSx-f8/?t=1907) and I know we talked about this with Addy, is the economics of this. You are making more economical satellites going out in space and the vehicle itself and so that's one thing and so I'd love. break that down in the economics there and then also further drill down the difference between on land like terrestrial data centers versus orbital yeah um so the whole thing is actually contingent on the launch cost um so if the launch cost gets below around 500 a kilo then it will be much cheaper to do this in space than terrestrially and i think a sort of good comparison for this is if you build a new solar project on earth to power a data center because solar is kind of the cheapest form of energy we have terrestrially and so the way you can think about it is solar terrestrially has these three big costs the biggest cost is the cost of permitted land

[32:39](https://realalpha.app/v/mdq6urSx-f8/?t=1959) depending where you are second biggest cost is the cost of batteries storage and backup power and then the last cost is the cost of the solar cells themselves and so in space number one we don't need permitted land so your biggest cost is gone we don't need batteries and backup power because they're 24-7 in the Sun and then we need eight times less solar cells because one square meter of solar panel in space produces about eight times the energy of one in space. So we have all these savings in space. The main additional cost we have is the launch cost and so that's where this trade-off comes and that's where we see when you run those numbers you come out to about $500 a kilo where it makes more sense to do in space than terrestrially. And of course right now with Starship we're at about $5,000 a kilo, sorry with Falcon 9

[33:22](https://realalpha.app/v/mdq6urSx-f8/?t=2002) the design of starship is designed to produce launch costs of uh internal launch costs for spacex of sort of 20 to 20 to 40 dollars a kilo um so so long as they pass that launch cost through to us at anything less than say 10 times their marginal launch cost or even more uh whether that makes sense for us um right now by the way in falcon 9 they charge two or three times their marginal launch cost so it seems reasonable yeah another thing that i listened to so i listened to