Gavin Baker On Why 'Crazy Idea' Of Space Data Centers Is Actually Logical, 'Superior' In Every Way
While the concept of orbiting server racks might sound like science fiction, veteran technology investor Gavin Baker argues that from a “first principles perspective,” data centers in space are inevitable.
Data Centers In Space Are ‘Superior’
Baker’s analysis, shared in a recent podcast called ‘Invest Like The Best,’ provides the economic logic behind Alphabet Inc.‘s (NASDAQ:GOOG) (NASDAQ:GOOGL) newly revealed “Project Suncatcher” and reports that OpenAI's Sam Altman explored acquiring a SpaceX rival.
According to Baker, the move off-planet isn’t just a gimmick—it is the only way to solve the physical constraints of AI scaling.
“In every way, data centers in space… are superior to data centers on Earth,” Baker stated.
The Physics Of Profit
Baker breaks the argument down to the two most expensive inputs for AI data centers: power and cooling. On Earth, these require massive infrastructure, from grid interconnects to complex liquid cooling systems. In orbit, the environment provides them for free.
“In space, you can keep a satellite in the sun 24 hours a day,” Baker explained, noting that solar energy is “30% more intense” without atmospheric interference. This eliminates the need for massive battery backups, a major cost driver on Earth.
Simultaneously, the vacuum of space solves the heat problem. “Cooling is free,” Baker said. “You just put a radiator on the dark side of the satellite… it’s as close to absolute zero as you can get.”
Faster Than Fiber
Beyond energy, Baker points to a speed advantage. Modern data centers connect racks via fiber optics, but light travels faster through a vacuum than through glass cables.
A network of satellites communicating via lasers would theoretically offer lower latency than terrestrial equivalents.
“The only thing faster than a laser going through a fiber optic cable is a laser going through absolute vacuum,” Baker noted.
The New Space Race
Baker's thesis aligns with the sudden “gold rush” among tech giants. Alphabet CEO Sundar Pichai recently confirmed plans to deploy prototype servers by 2027, a move Tesla Inc. (NASDAQ:TSLA) CEO Elon Musk called “Interesting.”
Meanwhile, OpenAI reportedly investigated a deal with Stoke Space to secure its own launch capabilities.
While launch costs remain a friction point, Baker believes the economics are undeniable. As AI power demands strain Earth’s utility grids, the “crazy idea” of space compute is rapidly becoming a logical necessity.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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