Starcloud Raises $250 Million for Orbital Data Centers, Prepares for Launch Market Squeeze
Starcloud, a startup developing orbital data centers for AI inference in space, announced a **$250 million extension** to its Series A funding round. This follows a $170 million raise in March 2026, and the extension now values the company at $2.3 billion.
The new capital will fund a larger manufacturing facility and accelerate the development of the company’s flagship spacecraft, Starcloud-3. This advanced orbital data center is designed to fly on SpaceX’s upcoming Starship rocket, highlighting the startup’s bet on next-generation launch capabilities.
CEO Philip Johnston emphasized the urgency of securing rocket space, noting that the launch market is tightening as SpaceX plans to phase out its Falcon 9 program. “We can see what’s coming — we’re going to need to book an enormous amount of launch,” Johnston told TechCrunch. The company has already filed a request with the FCC to operate a constellation of 88,000 spacecraft.
A $2.3 Billion Bet on Orbital Data Centers
Starcloud’s funding extension was led by Manhattan West Ventures, with notable participation from chipmaker Nvidia and networking giant Cisco. According to a person familiar with the deal, Nvidia contributed $25 million specifically to back the startup.
This strategic investment underscores Nvidia’s interest in the future of orbital data centers. Starcloud is the only known company currently operating an Nvidia H100 terrestrial data center GPU in orbit, and it claims to have trained a model using that hardware. Most other space-based GPUs are designed for simpler edge processing.
Johnston points to this collaboration as a key validation. “The reason they’ve chosen to do this investment now is because of all of this data that we got from Starcloud One,” he said. The company is sharing insights from its orbital H100 operations with Nvidia as the chipmaker develops its first purpose-built GPU for space, the Vera Rubin Space-1 chip.
Starcloud-3 and the Starship Factor
Starcloud’s long-term strategy is built around the potential of Starship to drive down launch costs, enabling a robust orbital inference layer that can compete with terrestrial data centers. The Starcloud-3 spacecraft is central to that vision, though it depends on the rocket’s success.
However, Starship’s development has faced delays. This week, SpaceX CEO Elon Musk said the company will postpone an attempt to catch a returning Starship rocket and aims for the first re-flight by the end of the year or early 2027.
“Obviously if we can’t book any SpaceX launch capacity in 2029, that will be challenging for us,” Johnston admitted.
For now, the company is pursuing a two-pronged launch strategy. It plans to launch two of its new-generation 8 kW compute satellites (Starcloud-2) on rideshare flights in 2027. These will perform orbital inference for customers, including U.S. government agencies.
Starcloud is also considering purchasing a dedicated Falcon 9 launch to deploy more spacecraft and is exploring contracts with other providers to hedge against market constraints.
Navigating a Tightening Launch Market for Orbital Data Centers
Launch costs are one of the biggest hurdles for companies looking to build orbital data centers. The situation is compounded by the fact that competing rockets, such as Blue Origin’s New Glenn and ULA’s Vulcan, are not flying regularly, while new vehicles like Rocket Lab’s Neutron are not yet operational.
“As soon as we can, we want to get under contract with things like Starship,” Johnston said. “One of the biggest costs is now on securing your launch capacity…launch is pretty constrained right now because Falcon 9 is scheduled to end in 2028.”
Engineering for the Space Environment
Starcloud is expanding its physical footprint to meet demand. The 25-person team is developing production lines at a 100,000-square-foot facility in Woodinville, Washington, near the satellite manufacturing hubs of SpaceX and Amazon.
Johnston’s engineers are focused on several key technical challenges for space-based computing. They are tracking the relationship between chip operating temperature and radiator size, optimizing radiation shielding placement, and ruggedizing hardware to survive the violence of a rocket launch.
While the space-ready Vera Rubin chip hasn’t been built yet, Starcloud hopes to fly it into orbit in late 2028. The company is also sharing its on-orbit data with Nvidia to help shape that final design.
The Future of Orbital Data Centers
With substantial backing from major tech and venture capital firms, Starcloud is positioning itself as a leader in the nascent space compute sector. Other participants in the funding round include Benchmark, EQT, Soma, NFX, 776, Cedar Capital, Goanna Capital, and Standard Capital.
As the launch market evolves and Starship’s timeline solidifies, the success of Starcloud’s ambitious orbital data centers plan will depend on securing reliable, cost-effective rocket rides. For now, the company is pressing forward with its technology development and manufacturing scale-up, aiming to turn space-based AI inference into a commercial reality.
