“By far the cheapest place to put AI will be space in 36 months or less.” ~ Elon Musk.

Musk has spent much of his career trying to get things off Earth.

Even his mother told Yahoo Finance that Elon “really would like to live in the city of Mars.”

But some of the ideas that once sounded almost as distant are starting to move a little closer.

Musk has plans for AI infrastructure in orbit. He’s talked about eventually using the Moon to help build it.

There is some logic behind the sci-fi. → AI data centers need enormous amounts of power, while space offers something Earth can’t: near-constant access to sunlight.

Now comes the practical question: can the chips actually work up there?

Google is preparing to find out, sending its own AI hardware into orbit aboard a SpaceX rocket.

And back on Earth, Musk is building the kind of enormous AI infrastructure that helps explain why anyone is thinking this far ahead in the first place.

We dug into the story.⇩

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The Ultimate Stress Test…

For all the talk about putting data centers in space, there’s a fairly important question to answer first:

Will the chips actually work up there?

→ Google is about to run the experiment.

Its Project Suncatcher prototype will carry the company’s TPUs — Tensor Processing Units, Google’s custom AI chips — into orbit aboard a SpaceX rocket.

The goal is to see what happens when AI hardware designed for a data center on Earth suddenly has to deal with radiation, extreme temperatures, launch forces and cooling in a vacuum.

Pass those tests, and the idea gets considerably more interesting.

The longer-term vision is clusters of solar-powered AI satellites, connected to one another with high-speed laser links and working together as a data center in orbit. ↓

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550,000 Chips and Counting…

While Google prepares its experiment in orbit, Musk’s AI buildout on Earth is already operating at a very different scale.

→ Colossus 2 currently has 550,000 Nvidia NVDA ( ▲ 1.76% ) chips running, according to Musk

And the number could climb quickly from here.

Another 220,000 GB300s were due to become operational this week, although we haven’t confirmed whether that milestone has been reached yet.

Then comes another wave.

Now → 550,000 chips
This week → +220,000 planned
November → +220,000 expected
Late December → +220,000 possible

If all three batches arrive, Colossus 2 would reach roughly 1.21 million Nvidia chips by year-end.

Musk says the repeated 110,000-chip blocks reflect the number of fiber-optic cables that can be plugged into a central switch.

Across both Colossus sites, Tesla investor Sawyer Merritt estimates the GPU hardware is worth more than $100 billion, with combined compute power above 2 GW.

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Right on Time…

Colossus isn’t being built solely to power Musk’s own AI ambitions. The infrastructure is also being opened up to outside customers.

Google’s cloud-services agreement with SpaceX is set to rise to $920 million per month starting in October as capacity ramps up, according to the reported agreement.

Anthropic has also agreed to use capacity at Colossus 1.

That makes the timing of those new chip waves commercially important.

More Nvidia chips → more computing capacity → more capacity available to customers.

At $920 million a month, Google’s agreement alone would run at an annualized pace of roughly $11 billion if that monthly payment remained constant for a full year.

Suddenly, 550,000 chips starts looking like more than an engineering flex.

Someone Has to Supply Them…

Musk’s Colossus plans require hundreds of thousands of additional chips.

Conveniently, Nvidia NVDA ( ▲ 1.76% ) is preparing to sell a lot more of them.

CEO Jensen Huang recently put it rather plainly:

“I expect Nvidia to sell twice as many chips next year as we do this year.”

For some perspective, Nvidia generated
→ $302.96 billion in revenue over the past 12 months, with
→ $277.2 billion — roughly 92% — coming from its data-center business.

Simply doubling that total revenue would imply roughly $606 billion.

That is a rough extrapolation, and next year’s chip mix and pricing will be different as newer systems like Vera Rubin arrive.

✱ Huang’s own longer-range number is plenty large without the extrapolation: he expects Nvidia to generate at least → $1 trillion in cumulative AI chip and systems revenue through the end of calendar 2027.

Musk’s plans offer a glimpse of where some of that demand could come from.

Colossus 2 already has 550,000 Nvidia chips running. Another 660,000 are planned by year-end.

And that’s one data center. ↓

Now Comes the Rocket…

While Musk was laying out plans for hundreds of thousands of new Nvidia chips, another part of his infrastructure plan was having a rather important morning.

→ Starship reached orbit carrying a real payload.

On Monday, Flight 14 deployed 26 Starlink V3 satellites — the first time Starship had successfully carried satellites into orbit.

And payload capacity is a big part of Starship’s appeal.

A single Starship is expected to eventually carry as many as 60 Starlink V3 satellites, roughly 20× the capacity of a Falcon 9.

And Musk’s ambitions don’t stop at communications satellites.

SpaceX has said it eventually wants to use the rocket to deploy AI compute satellites as well.

Which brings us back to that quote at the top.

Putting AI infrastructure in space is one thing.

!!! Getting enough hardware up there to make it useful is another.

→ Which is why Starship’s 26-satellite delivery feels like more than a successful test flight.

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