There aren’t enough rockets for space data centers. Cowboy Space raised $275 million to build them.

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, and they’re too expensive.

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

That leaves space data center programs targeting the mid-2030s, like Google Suncatcher, or preparing to start running edge processing tasks for space sensors, like Starcloud.

In theory, there is a third way: “We’re setting up our own rocket program,” Baiju Bhatt, the 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 million Series B round at a post-money valuation of $2 billion, led by Index Ventures, as a down payment on that work. Breakthrough Energy Ventures, Construct Capital, IVP and SAIC also participated.

Bhatt, co-founder of online stock platform Robinhood, launched the startup in 2024 as Aetherflux, with plans to collect abundant solar energy in space and beam it to Earth. The idea of ​​data centers in space led the company to use its electricity in orbit. The practical realities of that effort in turn led him to a rocket development program and the company’s new name.

Bhatt said he had spoken to multiple launch providers to try to find a path where his company would only build satellites, but was unable to find enough launch capacity to truly scale an orbital data center business, or do so in a way where unit economics could compete with terrestrial alternatives.

“There’s a lot of new missiles coming online, but if we look at it in three, four years, it’s still very, very scarce, and I think a lot of the first party missile providers will actually specialize in their own payloads,” Bhatt said.

Although bringing the rocket internally makes sense, it is also crazy. Only a handful of private companies in the West, mainly SpaceX, Rocket Lab and Arianespace, consistently launch commercial rockets. Two others, Blue Origin and United Launch Alliance, have been struggling for years to drag their vehicles out of development hell. A number of startups, including Stoke Space, Firefly Aerospace and Relativity Space, have been working for years and are still waiting to deliver operational systems.

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

“The price here, and the size of this market, is big enough that there is room for many players to succeed,” Bhatt said. “I see the demand for AI becoming more and more acute, and I see the options on Earth becoming more and more limited.”

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

By building the rocket specifically to launch the data center satellites only, the design process should be simplified. 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. That means the rocket would be slightly more powerful than the SpaceX workhorse Falcon 9, but still smaller than the under-development Starship. Ultimately, Bhatt expects the booster to be 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 engine, the most complex and expensive part of any launch vehicle. Cowboy Space is still working on key development needs, such as facilities to test, produce and launch its rockets.

The new vision comes with a new name for the startup, to emphasize its mission to “bring humanity to the next level,” though Bhatt admits “it gives me a reason to wear a cowboy hat and also grow this sick mustache.”