Elon Musk’s 30-month warning: Move AI to space or fail

This article summarizes an episode of Stripe’s video series featuring Elon Musk, CEO of SpaceX.

Elon Musk, CEO of SpaceX / Photo credit: Shutterstock

Elon Musk, CEO of SpaceX, argues that the only way to grow AI is to move data centers into orbit. His analysis changes the AI race from being about better models to being about energy and manufacturing ability.

Growing AI on Earth is impossible because of hardware limits

The tech industry’s focus on software has made it ignore the realities of hardware.

Musk explains, “The noobs will look at the power consumption of a GB300 [chip] and multiply that… That’s a total noob [calculation]; you’ve never done any hardware in your life before. Besides the [chips], you’ve got to power all of the networking hardware… You’ve got to size for your peak cooling requirements… you’re going to have a 40% increase on your power just for cooling… You add another 20% to 25% multiplier on that because you’ve got to assume that you’ve got to take power offline to service it.”

Musk also pointed out that a shortage of equipment is stopping new power plants from being built. He explained that the necessary turbines are “sold out through 2030.” Because only three companies make the vanes and blades needed, they are “massively backlogged,” he said.

Orbital data centers create a new category

With options on Earth gone, the only place left is space. Musk believes this will happen because it makes financial sense.

Musk says, “Any given solar panel can do about five times more power in space than on the ground. You also avoid the cost of having batteries to carry you through the night. It’s actually much cheaper to do in space… The moment your cost of access to space becomes low, by far the cheapest and most scalable way to generate tokens is space. It’s not even close. It’ll be an order of magnitude easier to scale.”

A timeline for the move to space
“In 36 months, but probably closer to 30 months,” Musk predicts, “the most economically compelling place to put AI will be space. It will then get ridiculously better to be in space. The only place you can really scale is space.”

The coming electricity shortage

The push for orbital data centers comes from a problem on Earth. Musk sees a worldwide electricity shortage coming that the world is not ready for.

Musk warns, “If you’re putting data centers anywhere except China, where are you going to get your electricity? Especially as you scale. The output of chips is growing pretty much exponentially, but the output of electricity is flat. So how are you going to turn the chips on?”

He predicted that by the end of the year, companies would reach a limit where they can’t actually power their new systems. He warned that even as hardware arrives, it will start “piling up and won’t be able to be turned on.”

America’s manufacturing shortage creates a risk to the country

The energy shortage is compounded by manufacturing and labor constraints. Musk argues that the US is likely to lose a conventional manufacturing race against China.

Musk argued that the US can’t compete with China based on population size alone. He noted that with four times as many people and a strong work ethic, “we [United States] definitely can’t win with just humans.”

The plan for creating a new type of industry