There are not enough rockets for space data centers. Cowboy Space raised $275 million to build it.

The seemingly insatiable demand for AI computing has data center entrepreneurs looking to the stars. There’s a major problem: There aren’t enough rockets to put data centers into orbit on Earth, and they’re too expensive.

Most players are hoping that SpaceX’s Starship – which is expected to make its twelfth test flight as soon as this weekend – will solve the problem. But once the vehicle is operational it could be years before it is commercially available, given SpaceX’s internal satellite business. So did Blue Origin’s New Glenn rocket, which failed to deliver a satellite on its third launch in April.

That leaves space data center schemes that may be targeting the mid-2030s, such as Google Suncatcher, or preparing to start performing edge processing operations for space sensors, such as Starcloud.

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

Today, the company announced the closing of a $275 billion Series B round at a post-money valuation of $2 billion, led by Index Ventures, as a down payment on that project. Breakthrough Energy Ventures, Construct Capital, IVP, and SAIC also participated.

Bhatt, founder of online stock platform Robinhood, launched the startup in 2024 as Aetherflux, with plans to collect abundant solar energy from space and beam it down to Earth. The concept of space data centers led the company to turn to using its own electricity while in orbit. The practical realities of that endeavor, in turn, led him to a program to develop rockets, and a new name for the company.

Bhatt said he talked to many launch providers to try to find a way where his company would build only satellites, but he couldn’t find enough startup power to grow the orbital data center business, or to do so in a way that the economy could compete with the rest of the world.

“There are a lot of new rockets coming online, but as we look three, four years out, there’s still a lot of shortages, and I think you’re going to see a lot of first-party rocket suppliers specializing in their payloads,” Bhatt said.

Of course, while bringing a rocket indoors makes sense, it’s also nuts. Only a few private companies in the West, notably SpaceX, Rocket Lab and Arianespace, regularly launch commercial rockets. The other two, Blue Origin and United Launch Alliance, have been struggling for years to get their vehicles out of development hell. A number of startups, including Stoke Space, Firefly Aerospace, and Relativity Space, have worked for years and are still waiting to deliver applications.

This corporate prominence 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 worse and worse, and I see the options on Earth getting more and more limited.”

Another advantage, Bhatt says, is the company’s focus on this one market (data centers), and its unique design. Orbital rockets usually have a booster stage that flies the vehicle to the edge of space, and a second stage that carries the payload and moves it into orbit. Cowboy Space plans to build its data centers directly on the second stage of its rocket. Actually throwing back a bit: The first US satellite, Explorer 1, was built as the last stage of a rocket, complete with radio equipment and a few scientific instruments.

Making the rocket’s mission to launch data center satellites should simplify the design process. The company expects each satellite to weigh 20,000 to 25,000 kilograms and generate 1 MW of power with less than 800 GPUs. That means its rocket will be slightly more powerful than SpaceX’s workhorse Falcon 9, though still smaller than its underdeveloped Starship. Ultimately, Bhatt says, he expects the booster to be used again.

Cowboy Space has hired space industry veterans, 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, a complex and expensive part of any launch vehicle. Cowboy Space is still working on critical development needs, such as testing facilities, manufacturing and launching its rockets.

The new idea comes with a new startup name, emphasizing its mission to “empower humanity from the highest frontier,” though Bhatt admits it “gives me a reason to wear a cowboy hat and grow a sick mustache.”