Short seller James Chanos has slammed SpaceX and Tesla Inc.(NASDAQ:TSLA) CEO Elon Musk's orbital datacenter goal again as space-based AI compute garners interest from the tech industry.
Power Not A Long-Term Bottleneck
The investor on Monday quoted a post from Tesla Owners Silicon Valley on X, which showcased a video of Musk talking about electricity being a limiting factor for AI. "Electric power costs are roughly 6-7% of CPU/GPU rental revenues," Chanos said, outlining the difference between the cost of electricity and renting the hardware capabilities for AI.
He then outlined that energy was "abundant" and said that the regulatory framework and infrastructure need progress. "Power is not a long-term bottleneck. That is also why "Data Centers In Space" is absurd.
Electric power costs are roughly 6-7% of CPU/GPU rental revenues. Energy is abundant, but needs regulatory/infrastructure progress. Which will happen over the next few years. Power is not a long-term bottleneck. That is also why "Data Centers In Space" is absurd. https://t.co/HJ8uasxlsE
He then also said that the cost of orbital datacenters remains high. "Literally every cost other than power will be higher in space," he said, without factoring in "costs only found in space" like launch and redundancies. He also said that power was "a negligible cost" for ground-based datacenters on Earth.
Literally every cost other than power will be higher in space, and that's before other costs only found in space(launch, redundancy, etc.). And power is a negligible cost for terrestrial data centers. It's why the DCIS nut jobs won't show you any numbers. @SpaceX
This isn't the first time the short seller has criticized the idea of having datacenters in space, with Chanos earlier calling the concept "AI snake oil" and slamming Musk for suggesting the idea as his artificial intelligence startup xAImerged into SpaceX. Chanos also demanded that companies and proponents of the idea showcase actual savings from having datacenters in orbit.
Meanwhile, Musk earlier said that SpaceX's flagship orbital vehicle, Starship, would launch once every hour in three years, outlining his bullish stance on SpaceX's developmental efforts.
Starlink's Move To Offer Free Hardware
Earlier, Musk had also confirmed that SpaceX's satellite internet service Starlink was providing subsidized plans and free hardware as a means to broaden its customer base and target developing nations.
However, he also clarified that the move had no relation to Amazon.com Inc.'s (NASDAQ:AMZN) Leo (Project Kuiper) satellite internet service, which had sought an extension from the Federal Communications Commission (FCC) to deploy its satellites in orbit.
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