Credit: SpaceX
In Space, No One Can Hear You Ask An LLM for Restaurant Advice
Part of SpaceX’s IPO pitch was that they were going to be building data centers in space. And they are not alone – Cowboy Space Corporation and Orbital recently closed funding rounds to pursue a similar vision. These visions are premised on declining launch costs that decline significantly further with the commercial launch of SpaceX’s next heavy lift rocket and other technology developments.
However, it is my belief that these approaches are treating the power crunch as an engineering challenge, which is not what we actually have. We know how to build power plants and buildings on planet earth (where it is cheaper and easier), we are facing regulatory, new market development, and policy barriers.
While presumably we will make use of more space based solar for satellites and satellites will grow in their power capacity over time, the inference data centers in space thesis doesn’t make a lot of sense to me. The idea is that a constellation of satellites could each operate 120kw of data center power, which even if you group a whole bunch of mini satellites together, is not that much computer capacity in the scheme of things (you’d need thousands to have any scale). Even if we struggle to fix our interconnection and large load queues, I imagine the supply chain for natural gas turbines will catch up and folks will just build captive power plants if they need to – this would not be a good outcome from a climate, cost, or infrastructure planning perspective, but seems much more likely to me than thousands of space-based server racks. I will definitely be following along either way though!
Anthropic joins Frontier
The advanced market commitment coalition for carbon removals, Frontier Climate, announced a big new slug of funding ($900+ million) and a new big partner – Anthropic. This is good news for the carbon removals space after Microsoft paused new carbon removals purchases (as we discussed in April); for a more comprehensive look at the space, check out the State of Carbon Removal report, just out for 2026.
Virtual Power Plants!
I know how to iron my clothes and actually enjoy it relative to other home tasks, but I still make use of my local dry cleaner (shout out to Jin’s Cleaners). Similarly. Google is partnering with Voluts for a 100MW virtual power plant in PJM. While many data centers may be more flexible over time (especially if that’s what is required to connect to the grid), in practice it is going to be easier to just contract with other customers to adjust their loads. One easy way to do that is batteries – Voltus also recently acquired battery storage software startup Brightfield to improve the speed of battery asset deployment. Also in this space, SunRun, Tesla, and Renew Home announced they have 16GW of flexible capacity available themselves.
Shifting Perspectives on Data Centers
Recent polling from Heatmap shows that people now blame data centers for rising electricity bills, in a big shift from less than a year ago. Zooming from a bottom rung factor to a majority explanation, “Data centers” have crossed the chasm into a political topic, Of note, this is folks’ perception rather than an objective reality (half of respondents also blamed the oil and gas industry for electricity prices, although I’m not entirely sure why), but will certainly influence advocacy, voting, and policy decisions as a result.
Speaking of policy decisions, New York state passed a first in the nation one-year moratorium on data center development permits (for new facilities above 20 megawatts), although the Governor needs to support it for it to go into place and has not taken a position on it yet.
FERC Data Center Reforms Kumbuya
Also on the data center front, FERC told regional transmission operators to figure things out to better incorporate large data center loads in their processes and avoid cost shifting to consumers. Unlike at PJM, which everyone is upset with, it seems like approximately everyone was happy with this – they care pushing the operators to do something, moving expeditiously, but also not being overly prescriptive.
One Battle After Another
Also on the FERC front, the Supreme Court ruled that the President could fire independent commissioners without showing cause (essentially for any reason), which will undoubtedly impact FERC over time (and also the Nuclear Regulatory Commission), which have historically been bipartisan and relatively insulated from politics.
Other News
E-fuels company Twelve opened its first commercial plant, combining CO2 and green hydrogen to produce aviation fuel and naptha.
Sunzia (mentioned in April), is now the largest wind farm in the country.
This spring, more electricity in the US was produced from solar than from coal in the United States.
