There is a shortage of rockets for space data centers. Cowboy Space raised $275 million to build them.

With an apparently insatiable demand for AI computing, data center entrepreneurs are excited about the future. I have an important issue. There aren’t enough rockets to put data centers in Earth orbit, and rockets are too expensive.

Most officials are hopeful that SpaceX’s Starship, scheduled for its 12th test flight as early as this weekend, will solve the problem. But given SpaceX’s in-house satellite business, it could be years before the vehicle becomes operational. The same is true of Blue Origin’s New Glenn rocket, which failed to deliver a satellite on its third launch in April.

Space data center plans will therefore either target the mid-2030s, like Google Suncatcher, or prepare to start edge processing tasks for space sensors, like Starcloud.

In theory, there is a third way. “We are launching our own rocket program,” Baiju Bhatt, CEO and founder of Cowboy Space Corporation, told TechCrunch. He expects the first launch to occur by the end of 2028.

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

Mr. Bhatt, co-founder of online stock platform Robinhood, launched the startup as Aetherflux in 2024 with a plan to harvest the abundant solar energy in space and send it to Earth. The idea of ​​a space data center led the company to pivot to using power in orbit. The practical realities of that effort, in turn, led him to a rocket development program and a new name for the company.

Bhatt said the company explored the path of building only satellites by talking to multiple launch providers, but was unable to find enough launch capacity to truly expand its in-orbit data center business or do so in a way that would allow it to compete with ground-based alternatives on unit economics.

“There’s a lot of new rockets coming online, but I think if you look three or four years from now, it’s still going to be very rare and you’re going to see a lot of first-party rocket providers really specialize in their own payloads,” Butt said.

Of course, bringing rockets in-house is logical, but it’s also crazy. Only a handful of private companies in the West, primarily SpaceX, Rocket Lab, and Arianespace, continue to launch commercial rockets. Two other companies, Blue Origin and United Launch Alliance, have been struggling to drag their vehicles out of development hell for years. Many startups, including Stoke Space, Firefly Aerospace, and Relativity Space, have been working on it for years and are still waiting to deliver operational systems.

This corporate evolution puts Cowboy Space Corporation in direct competition with SpaceX and Blue Origin, the most advanced and well-funded players in the market.

“The prize money and the size of the market here are large enough that there is room for many players to succeed,” Butt said. “We see the demand for AI becoming increasingly demanding and the options on the planet becoming increasingly limited.”

One of the advantages, Bhatt argues, is the company’s focus on this single market (data centers) and its unique design. Orbital rockets typically have a booster stage to fly the vehicle to the edge of space and a second stage to carry the payload and deliver it to orbit. Cowboy Space plans to build a data center directly on the rocket’s second stage. This actually goes back a bit. Explorer 1, America’s first artificial satellite, was built as the final stage of a rocket packed with radio equipment and some scientific equipment.

Creating a rocket solely for launching 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 for just under 800 onboard GPUs. This means the rocket is slightly more powerful than SpaceX’s flagship rocket, the Falcon 9, but still smaller than the Starship it is developing. Butt said he hopes the boosters will eventually be reusable.

Cowboy Space employs space industry veterans such as former Blue Origin propulsion engineer Warren Lamont and former SpaceX launch director Tyler Glynn. The company also plans to manufacture its own rocket engines, the most complex and expensive part of a launch vehicle. Cowboy Space continues to address key development needs, including facilities for rocket testing, manufacturing and launches.

The new vision includes a new name for the startup to emphasize its mission to “empower humanity from the highlands,” but Butt admits it “gave me a reason to wear a cowboy hat and grow this sick mustache.”