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The hottest new address in AI infrastructure isn’t in Northern Virginia or West Texas.

It’s a few hundred miles straight up.

Alongside its debut earnings report this week, SpaceX (SPCX) announced that it’s teaming up with Nvidia (NVDA) to design the compute payload for Starmind AI1 – the first satellite in a planned orbiting network built to run AI workloads in outer space. 

Importantly, this isn’t a research payload or a proof-of-concept demo. Starmind AI1 is designed to run production AI workloads in orbit – on Nvidia’s top-of-the-line Vera CPUs, Rubin GPUs, and the Vera Rubin NVL72 rackscale system, the same architecture powering the most advanced AI data centers on Earth. 

And on SpaceX’s Q2 earnings call, Elon Musk went out of his way to shut down the sci-fi talk before the bears could even start. He said the Starmind satellite “is not some sort of far future distant thing.” SpaceX expects to start launching next year.

Now, we don’t take Musk timelines at face value. The man’s deadlines are aspirational by design. He’s missed enough of them that “Elon time” is now a popular term on Wall Street. Pencil in delays.

But the timeline isn’t the story. The commitment is.

Because back in April, we published a deep dive making the case that AI was living through its “generator moment” – that the binding constraints on AI’s growth are land, power, and water, and that the next grid wouldn’t be built on the ground at all. It would be built in orbit.

At the time, that was a thesis.

Four months later, it’s become more of a procurement schedule.

How Space Data Centers Moved From Thesis to Roadmap

Here’s what has happened since we published that first piece. Notice how the announcements keep moving down the stack, from filings to hardware to launch manifests:

In late April, Meta (META) signed a deal with Overview Energy to deliver a gigawatt of beamed power from space – Big Tech’s first purchase order for space-based energy. Blue Origin filed for its own constellation of 51,600 data center satellites. Alphabet‘s (GOOGL) Project Suncatcher – which pairs its custom TPUs with Planet Labs (PL) satellite hardware – completed radiation testing showing its chips can survive a five-year orbital mission, with two prototype satellites slated for early 2027. Starcloud, which trained the first language model in space last December on a single H100, launches Starcloud-2 in October with roughly 100 times the power generation and Nvidia’s newer architecture on board.

Then, in July, Intel (INTC) debuted Starfire: a radiation-hardened processor purpose-built for space computing, integrating CPU, graphics, neural, and image processing to let spacecraft run sophisticated AI workloads with less size, weight, and power. It’s expected to reach initial customers by year-end, designed for missions lasting more than a decade, and Intel has already signed partnership agreements with multiple government organizations. Notably, Intel Government Technologies’ Sean O’Neill framed the ambition as being partners, not just a component vendor.

Read that list again. Then ask yourself one question: do chipmakers build entire product lines for markets they don’t believe exist?

When both Nvidia and Intel – America’s most iconic chipmakers – are shipping silicon designed to survive radiation and vacuum , orbital compute has crossed the line from “thesis” to “roadmap.”

Why SpaceX’s Starmind AI1 Changes the Orbital Data Center Thesis

Of everything that’s happened since April, the Starmind announcement is arguably the most important – and not for the reason you might think.

The headline is “data center in space.” The tell is buried in Musk’s commentary about the architecture. 

SpaceX has decided to build exclusively on Nvidia’s Vera Rubin platform, and Musk says the optimized NVL72 design that flies on Starmind will be deployed on the ground as well as in orbit – because SpaceX views it as a radical simplification of the standard rack.

That means orbital compute is no longer being designed as some exotic, bespoke science project. It’s becoming a variant of the standard AI buildout – same chips, same racks, same software stack, different address. That’s how infrastructure transitions actually happen: not with a moonshot that replaces the old system, but with a standardized platform that can live in either environment and simply flows toward wherever power and cooling are cheapest.

And as we detailed in April, the direction of “cheapest” is not in dispute. Terrestrial compute costs are resource-bound – hostage to interconnection queues, water rights, and land scarcity – and they reliably rise. Orbital compute costs are technology-bound – hostage mainly to dollars-per-kilogram to orbit – and they reliably fall.

The Reality Check

Let’s be equally clear-eyed about what hasn’t changed: the economics still favor Earth. Today, by a lot.

The most rigorous independent look at this question, from SemiAnalysis in early June, pegs orbital compute at more than 4x terrestrial cost right now – roughly $8.64 versus $2.37 per GPU-hour for a comparable cluster – driven by launch costs and the shorter useful life of hardware in orbit. Their base case sees the premium narrowing to about 30% by the early 2030s, with full cost parity arriving around 2040. Optimists argue specific workloads pencil out as soon as 2028-2030. Skeptics – including engineers at Varda Space Industries – counter that orbit still runs roughly 3x more per watt.

Our own April analysis put the crossover around 2038, potentially pulling forward to 2036 as competition compresses launch costs. We stand by that range. And frankly, the fact that serious analysts are now fighting over which year parity arrives – rather than whether it arrives – is perhaps the most bullish development of all. Wall Street doesn’t argue this hard over things it plans to ignore. 

Just as important: the early market doesn’t need parity to form. Defense and space-based sensing programs need compute close to the sensor. Earth-observation workloads waste enormous downlink bandwidth shipping raw data to the ground. For those buyers, orbital compute is already the practical answer.

The Space Data Center Stocks Positioned to Benefit

So, how do we position? Mostly, the same way we laid out in April – but this week’s news reshuffles the pecking order.

Nvidia just picked up something the bears never model: a brand-new source of demand that isn’t in anyone’s model. Every Starmind-class satellite is an NVL72 system sold into a market that didn’t exist a year ago. And SpaceX standardizing exclusively on Vera Rubin is one of the more underappreciated design wins of this cycle.

Intel is now on the board. We’re not ready to call Starfire a thesis-changer for a company with Intel’s broader challenges. But a space chip built to run for a decade-plus, with government partnerships already signed, is a real foothold in this market. Watch the customer announcements.

Microchip Technology (MCHP) remains the most underappreciated name in the stack. It’s the dominant supplier of the radiation-hardened FPGAs that virtually every satellite needs, growing space revenue roughly 40% a year with almost no one covering it as an orbital compute play.

Rocket Lab (RKLB) and Redwire (RDW) are the purest picks-and-shovels plays. Every orbital data center has to be launched. And every one of them is, functionally, a flying power plant – which is exactly Redwire’s lane, as the maker of the ROSA solar arrays already proven on the International Space Station. Both stocks were hammered in the recent space selloff. As we wrote after SpaceX’s Q2 report, their charts are starting to act like they want to come back.

Planet Labs gets a quiet upgrade, too. Every Suncatcher milestone Google hits makes PL’s seat at that table more valuable.

One Housekeeping Note

In April, we recommended pre-IPO wrappers – the Tema Space Innovators ETF (NASA), DXYZ, XOVR – as the way to own SpaceX before it listed, with instructions to trim aggressively at the IPO. That trade has now played out. SpaceX trades under its own ticker. And with shares down as much as 32% from their post-IPO highs, investors finally get to buy the orbital compute flagship directly – at a discount to the euphoria, though with all the volatility and capex-driven turbulence we flagged in our earnings breakdown.

The Bottom Line: Orbital Compute Has Entered the Roadmap Phase

Every infrastructure transition follows the same arc: dismissed as fantasy, debated as economics, and then suddenly discussed as logistics.

Orbital compute just entered phase three. The chips exist. The regulatory filings are in. Prototypes are being tested, the launch dates are on calendars, and the two biggest names in AI hardware are building for it in silicon.

Will Starmind launch on Musk’s schedule? Probably not. Will the economics flip next year? No – the honest math says the crossover is still years away.

But the market never waits for the crossover. It prices the trajectory. 

And that’s exactly why I’ve been pounding the table on this moment.

Because everything we just walked through – the chips, the filings, the launch dates – is converging on what I believe is the single biggest wealth-creation setup of this cycle. I call it “XPANSE.”

It’s a project so enormous that Elon himself believes it could make early investors [1,000 times their money.

And the stakes go far beyond your portfolio. Right now, the entire AI economy rests on infrastructure that’s dangerously concentrated and dangerously constrained – a looming threat that one high-ranking government official has dubbed “an economic apocalypse.” XPANSE could be how America eliminates that threat before it detonates.

You don’t need to guess your way into this. In my new briefing, I lay out the three steps you must take today to get on the right side of this shift – and I give away the name and ticker of an investment perfectly positioned to capitalize on it, completely free.

The grid is going up whether you’re positioned or not. Which side of the trajectory will you be on?