Nvidia-Backed Starcloud Raises $170 Million at $1.1 Billion Valuation to Build AI Data Centers in Space

TLDR

• Starcloud has raised $170M at a $1.1 billion valuation, becoming Y Combinator’s fastest-ever unicorn at just 17 months
• The company is building data centers in low Earth orbit to bypass land and energy limits on Earth
• In November 2025, Starcloud launched the first Nvidia H100 GPU into orbit and ran AI training in space
• A second satellite launches in October 2026, featuring AWS Outposts and 100x more power than the first
• SpaceX and Blue Origin are pursuing similar orbital data center plans, with Elon Musk announcing a million-satellite network

Starcloud, a startup based in Redmond, Washington, has raised $170 million in a Series A round. The company is valued at $1.1 billion, making it a unicorn just 17 months after its Y Combinator demo day.

The round was led by Benchmark and EQT Ventures. It also included Macquarie Capital, NFX, Y Combinator, and a number of angel investors including former Boeing CEO Dennis Muilenburg and former Starbucks CEO Kevin Johnson.

This brings Starcloud’s total funding to $200 million. The company previously raised $34 million from investors including Andreessen Horowitz and In-Q-Tel, the CIA’s venture capital arm.

Starcloud’s goal is to build data centers in low Earth orbit. The idea is to tap into near-continuous solar power in space, which would remove the energy and land constraints that slow down data center construction on Earth.

Building a new data center on Earth can take up to five years due to permitting and energy project delays. Starcloud says space-based infrastructure bypasses those problems entirely.

“The AI revolution is colliding with the physical limits of our terrestrial energy grid,” said CEO Philip Johnston. “By moving AI compute to space, we unlock access to unlimited solar power and completely remove the energy bottleneck.”

First GPU in Orbit

In November 2025, Starcloud launched its first satellite, Starcloud-1, with an Nvidia H100 chip on board. The company says it was the first time the GPU had been deployed in space. The mission also completed the first AI model training in orbit and ran a version of Google’s Gemini model in space.

The satellite was designed and built in just 21 months on a pre-seed budget of $3 million, which the company describes as a record pace for the aerospace industry.

Starcloud already has partnerships with Nvidia, Amazon Web Services, and Google Cloud.

Next Launch Planned for October

The company’s second satellite, Starcloud-2, is set to launch in October 2026. It will carry AWS Outposts hardware and will generate 100 times more power than Starcloud-1. It will also feature the largest commercial deployable radiator ever sent to space.

Starcloud-2 will be the first of its satellites to run commercial cloud workloads for paying customers, including early customer Crusoe.

The new funding will go toward building next-generation Starcloud-3 satellites, expanding manufacturing, hiring, and securing future launch contracts.

The company has long-term plans for a constellation of 88,000 satellites. It expects space-based data centers to become cost-competitive with Earth-based facilities by 2028 or 2029, as launch costs continue to fall.

Starcloud is not alone in this space. In February 2026, Elon Musk’s SpaceX announced plans for a million-satellite orbital data center network after acquiring his AI startup xAI. Jeff Bezos’ Blue Origin has also expressed interest in similar infrastructure.

Johnston said Starcloud is working on energy offtake agreements with major cloud providers, with announcements expected in the coming months.

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