The hunger for AI computing power seems endless, and data center entrepreneurs are now setting their sights on outer space. But there's a major roadblock: there simply aren't enough rockets to place data centers in Earth's orbit, and the ones available are prohibitively expensive. Many in the industry are banking on SpaceX's Starship—which could conduct its twelfth test flight as early as this weekend—to solve the problem. However, even once it becomes operational, it may take years before it's commercially accessible, largely because of SpaceX's own satellite business. The same challenge applies to Blue Origin's New Glenn rocket, which failed to deploy a satellite during its third launch in April. As a result, space-based data center projects are either aiming for the mid-2030s, like Google Suncatcher, or gearing up to start with edge processing tasks for space sensors, such as Starcloud.

The founder expects the first launch to happen before the end of 2028. Today, the company announced the close of a $275 million Series B funding round, achieving a post-money valuation of $2 billion. The round was led by Index Ventures, with participation from Breakthrough Energy Ventures, Construct Capital, IVP, and SAIC. The founder, who also co-founded the online stock platform Robinhood, launched this startup in 2024 under the name Aetherflux. The original plan was to collect abundant solar energy in space and beam it down to Earth. But the concept of space-based data centers led the company to pivot: instead of sending energy down, they would use the electricity generated in orbit. The practical realities of that shift eventually led to a rocket development program and a new company name.

Bhatt said he spoke with multiple launch providers, hoping to find a path where his company could focus solely on building satellites. But he couldn't secure enough launch capacity to scale an orbital data center business effectively, nor could he achieve unit economics that could compete with terrestrial alternatives. "There's a lot of new rockets coming online, but as we look three or four years out, it's still very, very scarce," Bhatt explained. "I think you're going to see a lot of the first-party rocket providers actually specialize into their own payloads." Of course, while bringing rocket development in-house makes logical sense, it's also a bold—some might say crazy—move. In the West, only a handful of private companies—namely SpaceX, Rocket Lab, and Arianespace—consistently launch commercial rockets. Two others, Blue Origin and United Launch Alliance, have struggled for years to move their vehicles out of development. Numerous startups, including Stoke Space, Firefly Aerospace, and Relativity Space, have been working for years and still haven't delivered operational systems.

This evolution puts Cowboy Space Corporation in direct competition with SpaceX and Blue Origin, the most advanced and best-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 focused approach on a single market—data centers—and its unique design. Orbital rockets typically have a booster stage that carries the vehicle to the edge of space, and a second stage that delivers the payload to orbit. Cowboy Space plans to build its data centers directly into the second stage of its rocket. This is actually a throwback: the first U.S. satellite, Explorer 1, was built as the final stage of a rocket, packed with radio equipment and 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 generate 1 MW of power to support just under 800 onboard GPUs. That means its rocket would be slightly more powerful than SpaceX's workhorse Falcon 9, though still smaller than the under-development Starship. Eventually, Bhatt says, he expects the booster to be reusable. Cowboy Space has hired veterans from the space industry, including former Blue Origin propulsion engineer Warren Lamont and former SpaceX launch director Tyler Grinne. 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, such as facilities for testing, manufacturing, and launching its rockets. The new vision comes with a new name for the startup, meant 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."