There aren’t enough rockets for space data centers — Cowboy Space raised $275M to build them

The apparently insatiable demand for AI compute has data center entrepreneurs looking to the stars. There’s a key problem: There aren’t enough rockets to put data centers in orbit around Earth, and they’re too expensive.

Most of the players are hoping that SpaceX’s Starship — expected to make its 12th test flight as soon as this weekend — will solve the problem. But once the vehicle is operational, it may be years before it is commercially available, given SpaceX’s internal satellite business. The same is true for Blue Origin’s New Glenn rocket, which failed to deliver a satellite during its third launch in April.

That leaves space data center schemes either targeting the mid-2030s, like Google’s Suncatcher, or preparing to start off doing edge processing tasks for space sensors, like Starcloud.

In theory, there’s a third way: “We’re standing up our own rocket program,” Baiju Bhatt, the CEO and founder of Cowboy Space Corporation, told TechCrunch. He expects the first launch before the end of 2028.

Today, the company announced the closure of a $275 million Series B round at a post-money valuation of $2 billion, led by earlier backer Index Ventures, as a down payment on that work. Breakthrough Energy Ventures, Construct Capital, IVP, and SAIC also participated. The company had previously raised $80 million from investors, including Index, Breakthrough Energy Ventures, Andreessen Horowitz, and New Enterprise Associates.

Bhatt, a co-founder of online stock platform Robinhood, launched this startup in 2024 as Aetherflux, with plans to collect abundant solar energy in space and beam it down to Earth. The idea of space data centers led the company to pivot toward using its electricity while in orbit. The practical realities of that effort, in turn, led him to a rocket development program, and the company’s new name.

Bhatt said he spoke to multiple launch providers to try and find a path where his company would build only satellites, but he couldn’t find enough launch capacity to truly scale an orbital data center business, or do so in a way where the unit economics could compete with terrestrial alternatives.

“There’s a lot of new rockets that are coming online, but as we look three, four years out, it’s still very, very scarce, and I think that you’re going to see a lot of the first-party rocket providers actually specialize into their own payloads,” Bhatt said.

Of course, while bringing the rocket in-house is logical, it’s also nuts. Only a handful of private companies in the West, mainly SpaceX, Rocket Lab, and Arianespace, are consistently launching commercial rockets. Two others, Blue Origin and United Launch Alliance, have been struggling to drag their vehicles out of development hell for years. A number of startups, including Stoke Space, Firefly Aerospace, and Relativity Space, have worked for years and are still waiting to deliver operational systems.

This evolution of the company will also bring Cowboy Space Corporation into direct competition with SpaceX and Blue Origin, the most advanced and well-funded players in the market.

“The prize here, and the size of this market, is big enough that there’s room for many players to succeed,” Bhatt said. “I see the demand for AI getting more and more acute, and I see the options on Earth getting more and more limited.”

One advantage, Bhatt argues, is the company’s focus on this single market (data centers), and its unique design. Orbital rockets typically have a booster stage that flies the vehicle to the edge of space, and a second stage that carries the payload and delivers it to orbit. Cowboy Space plans to build its data centers directly into the second stage of its rocket. It’s actually a bit of a throwback: The first U.S. satellite, Explorer 1, was built as the final stage of a rocket, filled with radio equipment and a few scientific instruments.

Making the rocket purpose-built only to launch its data-center satellites should simplify the design process. The company expects each satellite to have a mass of 20,000 to 25,000 kilograms and to generate 1 MW of power for just under 800 onboard GPUs. That means its rocket would be slightly more powerful than the SpaceX’s workhorse, Falcon 9, though still smaller than Starship, which is still under development. Eventually, Bhatt says, he expects the booster to be reusable.

Cowboy Space has hired veterans of the space industry, including former Blue Origin propulsion engineer Warren Lamont and former SpaceX launch director Tyler Grinnell. The company also plans to build its own rocket engine, the most complex and expensive part of any launch vehicle. Cowboy Space is still working through key development needs, like facilities to test, manufacture, and launch its rockets.

The new vision comes with a new name for the startup, to emphasize its mission to “power humanity from the high frontier,” although Bhatt admits “it gives me a reason to wear a cowboy hat and also grow this sick mustache.”