Starcloud hits $1.1 billion valuation for orbital data center bet

Starcloud has raised $170 million in a Series A funding round—an early-stage venture capital funding round—valuing the space compute company at $1.1 billion. The round, which closed 17 months after its demo day, was led by Benchmark and EQT Ventures. This funding pushes Starcloud’s total amount raised to $200 million and establishes it as a unicorn, a startup valued at over $1 billion. The company, a Y Combinator graduate, is betting on outsourcing data centers to orbit, though the business model depends on unproven technology and significant capital expenditure.

Starcloud launched its first satellite in November 2025 carrying an Nvidia H100 GPU. To prove it could run terrestrial chips in space, Starcloud plans to launch Starcloud 2 later this year with multiple GPUs, including an Nvidia Blackwell chip and an AWS server blade. However, Starcloud’s path to cost-competitiveness depends on SpaceX’s Starship, a reusable heavy lift rocket. Johnston expects commercial access to Starship to open up in 2028 and 2029. “We’re not going to be competitive on energy costs until Starship is flying frequently,” said Philip Johnston, CEO and founder of Starcloud. Powerful space computers will be cost-prohibitive until a new generation of rockets starts launching at a high operational cadence, which might not happen until the 2030s. If Starship is delayed, Johnston said the company will carry on launching smaller versions on Falcon 9.

To prepare for Starship, Starcloud is developing a data center spacecraft called Starcloud 3. Its technical specifications include:

• A power capacity of 200 kilowatt
• A weight of three-ton
• Design compatibility with the deployment system SpaceX uses for Starlink satellites

Johnston expects Starcloud 3 to achieve costs of around $.05 per kw/hour of power, provided commercial launch costs land around $500 per kilogram.

Starcloud faces competition from other space data center developers, including Aetherflux, Aethero, and Google’s Project Suncatcher. Additionally, SpaceX has asked the U.S. government for permission to operate satellites for distributed compute. Johnston argues SpaceX is building for a slightly different use case, serving Grok and Tesla workloads. He believes SpaceX is unlikely to act as an energy and infrastructure player in the way Starcloud does, even if it eventually offers a third-party cloud service.

The industry remains in its infancy. While Nvidia sold nearly 4 million GPUs to terrestrial hyperscalers—large-scale cloud computing providers—in 2025, the number of GPUs in orbit is in the dozens. SpaceX’s Starlink network of 10,000 spacecraft produces around 200 megawatts of energy, whereas terrestrial data centers with more than 25 gigawatts of power are under construction in the U.S. Most companies expect complex training workloads to come long after simpler inference tasks—running AI models to make predictions—take place in orbit.

Why it matters

Starcloud’s $170 million Series A funding values the company at $1.1 billion, highlighting the growing interest in orbital data centers despite significant technical and financial hurdles.