Starcloud, an orbital AI infrastructure startup, has raised $170 million at a $1.1 billion valuation in a funding round led by Benchmark and EQT Ventures.
Despite resource and political constraints slowing development on Earth, the latest funding reflects growing investor interest in space-based data centers. However, the model relies on unproven technology and significant capital investment, TechCrunch reports.
Starcloud has now raised a total of $200 million, and launched its first satellite with a Nvidia H100 GPU in November 2025. The company will launch a more powerful version called Starcloud 2, later this year with multiple GPUs, including a Nvidia Blackwell chip and an AWS server blade, as well as a bitcoin mining computer.
READ: Nvidia partners with space data center startup, secures extra $10 million (February 28, 2025)
The AI startup will also develop a data center spacecraft designed to launch from Starship, the reusable heavy lift rocket being built by Elon Musk’s SpaceX, according to reports. Starcloud 3, as the spacecraft is named, will be 200 kilowatts, three-ton spacecraft that fits the “pez dispenser” system SpaceX designed to deploy its Starlink satellites from Starship.
According to CEO and founder Philip Johnston, this will be the first orbital data center that is cost-competitive with terrestrial data centers, with costs on the order of $.05 per kw/hour of power — if commercial launch costs land around $500 per kilogram. However, Starship isn’t flying yet. Johnston said he expects commercial access to open up in 2028 and 2029.
“If it ends up being delayed, we’ll just carry on launching the smaller versions on Falcon 9,” Johnston said. “We’re not going to be competitive on energy costs until Starship is flying frequently.”
Starcloud, which has long-term plans for an 88,000-satellite data center constellation, will use the new capital to fund next-generation satellites, manufacturing expansion and future launch contracts as it moves toward commercial operations, it said on Monday.
READ: Alphabet acquires clean energy firm as AI data center demand surges (December 23, 2025)
Johnston said that the main customer contracts that are committed will be “for other spacecrafts, 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,” he added.
Starcloud is facing competition from companies like Elon Musk’s SpaceX and Jeff Bezos’ Blue Origin in the race to move power hungry data centers off planet. In February, Musk’s SpaceX acquired his AI startup xAI and revealed plans for a million-satellite orbital data center network. Blue Origin has also expressed similar ambitions.
Aetherflux, Google’s Project Suncatcher, and Aethero — which launched Nvidia’s first space-based Jetson GPU in 2025 — are also developing space data center businesses.