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 aiming for the stars. There’s a major problem: There aren’t enough rockets to put data centers into Earth orbit, and they’re expensive.

Most players are hoping SpaceX’s Starship spacecraft — which is expected to make its 12th test flight this weekend — will solve the problem. But once the vehicle is operational, it could be years before it becomes commercially available, given SpaceX’s internal satellite business. The same is true for Blue Origin’s New Glenn rocket, which failed to launch a satellite during its third launch in April.

This leaves space data center plans either targeting the mid-2030s, like Google Suncatcher, or preparing to start performing edge processing tasks for space sensors, like Starcloud.

In theory, there is a third way: “We are supporting our own rocket program,” Baiju Bhatt, CEO and founder of Cowboy Space Corporation, told TechCrunch. The first launch is expected before the end of 2028.

The company today announced the closing of a $275 million Series B round at a post-cash valuation of $2 billion, led by Index Ventures, as the first tranche on this business. Breakthrough Energy Ventures, Construct Capital, IVP and SAIC also participated.

Bhatt, a co-founder of online stock platform Robinhood, launched the startup in 2024 called Aetherflux, with plans to collect abundant solar energy in space and send it to Earth. The idea of ​​space-based data centers prompted the company to focus on using electricity while in orbit. The practical realities of this effort led him in turn to the rocket development program and the new name of the company.

Bhatt said he talked to several launch service providers to try to find a path where his company only builds satellites, but he couldn’t find enough launch capacity to scale the orbital data center business, or do so in a way where unit economics could compete with terrestrial alternatives.

“There are a lot of new rockets that will be launched, but after three or four years, they are still very rare, and I think you will see a lot of first-party rocket providers actually specializing in their own payloads,” Bhatt said.

Of course, while bringing the rocket inside makes sense, it’s also crazy. Only a few private companies in the West, notably SpaceX, Rocket Lab and Arianespace, launch commercial rockets on an ongoing basis. Two other companies, Blue Origin and United Launch Alliance, have been struggling to dig their vehicles out of development hell for years. A number of startups, including Stoke Space, Firefly Aerospace and Relativity Space, have been working for years and are still waiting for operational systems to be delivered.

This development of the company will also bring Cowboy Space Corporation into direct competition with SpaceX and Blue Origin, the two most advanced and well-funded players in the market.

“The prize here, and the size of this market, is large enough that there is room for many players to succeed,” Bhatt said. “I see the demand for AI getting more intense, and I see the options on the ground becoming more and more limited.”

One advantage, Bhatt says, is the company’s focus on this single market (data centers) and its unique design. Orbital rockets typically contain a booster stage that carries the vehicle to the edge of space, and a second stage that carries the payload and delivers it to orbit. Cowboy Space plans to build its data centers directly into the second stage of its rocket. It’s actually a throwback: America’s first satellite, Explorer 1, was built as the final stage of the rocket, filled with radio equipment and some scientific instruments.

Making the rocket specifically designed to launch satellites for its data center should simplify the design process. The company expects each satellite to have a mass of 20,000 to 25,000 kilograms and to generate 1 megawatt of power for just under 800 graphics processing units on board. This means its rocket will be slightly more powerful than the SpaceX Falcon 9, although still smaller than the Starship under development. Eventually, Bhatt says, he expects the booster to become reusable.

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 motor, the most complex and expensive part of any launch vehicle. Cowboy Space is still working on major development needs, such as testing, manufacturing and launch facilities for its rockets.

The new vision comes with a new name for the startup, to emphasize its mission of “supporting humanity from the top,” though Bhatt admits “it gives me a reason to wear a cowboy hat and also grow that sick moustache.”