A space technology company has achieved unicorn status after securing $170 million in new investment, highlighting the intensifying competition to establish artificial intelligence data centers beyond Earth’s atmosphere.
Starcloud, based in Redmond, Washington, reached a $1.1 billion valuation through the funding round led by Benchmark and EQT Ventures. The investment comes as major players like Elon Musk’s SpaceX and Jeff Bezos’ Blue Origin pursue similar orbital computing ambitions.
The startup’s ambitious vision includes deploying an 88,000-satellite network designed to handle massive AI computational demands. The fresh capital will support advanced satellite development, expanded manufacturing capabilities, and future rocket launch agreements as the company prepares for commercial deployment.
“The main customer contracts that are committed are for other spacecraft, particularly Earth Observation and DOW satellites. We are also working on some binding energy offtake agreements with the hyperscalers to be announced in the coming months,” company co-founder and CEO Philip Johnston explained to Reuters.
The space-based computing concept has gained momentum as traditional ground-based data centers struggle with energy demands and capacity limitations from AI workloads. Orbital facilities could tap into nearly constant solar energy availability.
Competition in this emerging sector intensified in February when SpaceX acquired Musk’s AI company xAI and announced plans for a million-satellite orbital data center network. Amazon founder Bezos’ Blue Origin has also signaled interest in similar projects.
Starcloud has already established partnerships with technology giants including Nvidia and cloud divisions of Amazon and Google. The company made headlines in November by launching a satellite equipped with Nvidia’s H100 processor, successfully demonstrating AI training and computational tasks in space for the first time in the industry.
A follow-up mission scheduled for October will feature Amazon Web Services’ AWS Outposts technology platform.
While orbital infrastructure could solve power and real estate constraints facing terrestrial data centers, high launch expenses remain a significant hurdle. However, Johnston expects costs to decrease sufficiently by 2028 or 2029 to make space-based facilities economically competitive with Earth-bound alternatives.
The recent investment brings Starcloud’s total raised capital to $200 million. The company previously secured $34 million from notable investors including Andreessen Horowitz and In-Q-Tel, the venture capital arm of the Central Intelligence Agency.
