The insatiable appetite for AI compute has driven entrepreneurs to increasingly audacious places. Cloud wasn't enough. Terrestrial data centres are running out of land, water, and power. The next frontier — literally — is orbit. The problem? There are not nearly enough rockets to get data centres up there. So Baiju Bhatt, the co-founder of retail investing platform Robinhood, has decided to build his own.

Cowboy Space Corporation has announced the closure of a $275 million Series B round at a post-money valuation of $2 billion, led by Index Ventures, with participation from Breakthrough Energy Ventures, Construct Capital, IVP, and SAIC. The capital will fund the company's rocket development programme alongside its orbital data centre ambitions.

FROM SOLAR ENERGY TO ROCKETS: A STARTUP THAT KEPT FOLLOWING THE PROBLEM

Bhatt launched the company in 2024 under the name Aetherflux, originally with plans to harvest abundant solar energy in space and beam it down to Earth. The concept of space data centres led the company to pivot toward using that electricity while still in orbit — and the practical realities of making that work economically led him, in turn, to a rocket development programme and an entirely new company name.

The logic of the pivot is traceable and honest. Bhatt said he spoke to multiple launch providers in search of a path where his company would only need to build satellites, but he could not find sufficient launch capacity to scale an orbital data centre business — nor do so with unit economics that could compete with terrestrial alternatives.

"There's a lot of new rockets coming online, but as we look three, four years out, it's still very, very scarce," Bhatt told TechCrunch. "I think you're going to see a lot of the first-party rocket providers actually specialise into their own payloads."

The solution, uncomfortable as it is, was to build the launch capability himself. "We're standing up our own rocket programme," Bhatt said, with the first launch expected before the end of 2028.

THE BOTTLENECK NO ONE WANTS TO ACKNOWLEDGE

The space data centre category has attracted serious capital and serious names — but virtually every player in it is sitting on the same uncomfortable dependency: SpaceX's Starship.

Most players are hoping that Starship — expected to make its twelfth test flight imminently — will solve the launch capacity problem. But once the vehicle is operational, it may be years before it is commercially available given SpaceX's internal satellite business. The same constraint applies to Blue Origin's New Glenn rocket, which failed to deliver a satellite during its third launch in April. That leaves most space data centre schemes either targeting the mid-2030s, like Google's Suncatcher project, or focusing on edge processing tasks for space sensors in the near term.

Bhatt's read of this landscape — that waiting for Starship is not a viable business strategy — is the core intellectual bet behind Cowboy Space's entire existence. If he is right that the first-party rocket providers will prioritise their own payloads indefinitely, then building proprietary launch capability is not an extravagance. It is the only viable path to scale.

THE ROCKET: BUILT AROUND ITS PAYLOAD

Cowboy Space plans to build its data centres directly into the second stage of its rocket — a design philosophy that echoes Explorer 1, the first US satellite, which was built as the final stage of a rocket and packed with radio equipment and scientific instruments. Making the rocket purpose-built only to launch its data-centre satellites is intended to simplify the overall design process.

The technical specifications are precise and ambitious. Each satellite is expected to have a mass of 20,000 to 25,000 kilograms and generate 1 MW of power for just under 800 onboard GPUs — making the required rocket slightly more powerful than SpaceX's workhorse Falcon 9, though still considerably smaller than Starship. The booster is eventually expected to be reusable.

The company has hired veterans of the space industry, including former Blue Origin propulsion engineer Warren Lamont and former SpaceX launch director Tyler Grinne. Cowboy Space also plans to build its own rocket engine — the most complex and expensive component of any launch vehicle — and is still working through key development requirements including facilities for testing, manufacturing, and launch operations.

THE COMPETITIVE REALITY

This evolution puts Cowboy Space in direct competition with SpaceX and Blue Origin — the most advanced and well-capitalised players in the commercial launch market. Only a handful of private companies in the West, mainly SpaceX, Rocket Lab, and Arianespace, are consistently launching commercial rockets. A number of well-funded startups including Stoke Space, Firefly Aerospace, and Relativity Space have been working for years and are still waiting to deliver fully operational systems.

Bhatt is not dismissing the difficulty. "The prize here, and the size of this market, is big enough that there's room for many players to succeed," he said. "I see the demand for AI getting more and more acute, and I see the options on Earth getting more and more limited."

That framing — AI demand growing faster than Earth can accommodate it — is the thesis that has attracted serious institutional capital to a company that, by any conventional measure, is attempting something extraordinarily hard. Building one transformative technology company is rare. Building a rocket company to support an orbital data centre business, from scratch, on a 2028 timeline, while competing against Elon Musk and Jeff Bezos, is the kind of ambition that most investors would dismiss — unless they genuinely believe the AI compute shortage is as severe and as durable as Bhatt does.