Starcloud secures $250 million to expand orbital data center ambitions amid launch constraints

Starcloud, a startup focused on deploying satellites for AI inference in orbit, has secured an additional $250 million in funding, extending its March Series A round to a total of $250 million. The funding brings the company’s valuation to $2.3 billion. The capital will be used to expand manufacturing operations and advance the development of its largest orbital data center spacecraft, Starcloud-3, which is planned to launch on SpaceX’s Starship rocket. CEO Philip Johnston emphasized the growing importance of securing launch capacity as the market for rocket transportation becomes more constrained, noting that SpaceX’s Falcon 9 program is set to end in 2028. Starcloud has already applied for FCC approval to operate 88,000 spacecraft and is seeking contracts with launch providers like Starship to ensure future missions. Launch costs remain a major challenge for orbital data center startups, with some companies exploring the development of their own rockets. SpaceX’s planned transition to Starship, which is still unproven, complicates planning for satellite operators, especially as other rockets like Blue Origin’s New Glenn and ULA’s Vulcan are not yet operational. Starcloud plans to launch two of its new 8 kW compute satellites, Starcloud-2, on rideshare flights in 2027, serving US government agencies. The company is also considering a dedicated Falcon 9 launch and contracts with other providers to support future missions. Johnston remains optimistic about Starcloud’s long-term vision, which hinges on SpaceX’s ability to reduce launch costs through the reuse of Starship. He noted that SpaceX CEO Elon Musk has delayed a Starship catch attempt and plans to re-fly the vehicle by late 2027 or early 2028. Johnston warned that if SpaceX launch capacity is unavailable in 2029, it would pose a significant challenge for Starcloud. The funding round was led by Manhattan West Ventures and included participation from Nvidia, Cisco, Benchmark, EQT, Soma, NFX, 776, Cedar Capital, Goanna Capital, and Standard Capital. Nvidia’s $25 million investment was highlighted by Johnston as a key signal of Starcloud’s position in the space compute sector. Starcloud is the only company known to operate a Nvidia H100 GPU in orbit and has trained a model using it, a capability most other space GPUs lack. The company is sharing insights with Nvidia as the chipmaker develops its first space-specific GPU, the Vera Rubin Space-1. Starcloud’s engineers are working on key design choices for the Vera Rubin Space-1, including thermal management, radiation shielding, and ruggedization for rocket launches. The company, which currently employs 25 people, is building production lines at a 100,000 square foot facility in Woodinville, Washington, near SpaceX and Amazon’s satellite manufacturing sites.