Data Centers in Space: How the AI Boom Is Pushing America Toward the Final Frontier

Speaker 1 (00:08):
There's a lot of talk about data centers, folks. I mean,
it seems like every time you turn on CNBC or
Bloomberg Television, all you hear is data center's, data center's
data centers. Where are they building? Is it going to
make my electricity bill go up? Why not put him
on the moon? My next guest is there in all
of the research. He is a professor at the Harvard
Business School, The Brightest Minds in all of the world,
after Penn State University, my Nitney Lions, my alma bater.
He is also the author of Space to Grow, Unlocking
the Final Economic Frontier. His name is Matthew winzerl Met.
Thanks for coming back on the show. Hello Future, I
appreciate you coming on. Should we put data centers on
the moon?

Speaker 2 (00:50):
As you teed up, we're going to be putting data
centers everywhere, it sounds like, right, And we're going to
need power, and we're gonna need to cool them, and
they're going to need to be secure. So, you know,
I've been hearing from various folks in the industry that
this idea, which originally seemed a little crazy, is seeming
increasingly less crazy over time, and so whether it's on
the moon or in orbit. Putting data centers in space
is seeming like an increasingly plausible idea.

Speaker 1 (01:17):
So put very simply, data centers are what in terms
of what's the analogy that you would use. Everyone says
they're the electric grids of AI. They're the power centers
of artificial intelligence. You know, I would argue they're kind
of more than that. In many ways, they could be
almost similar to gas stations even in terms of being
able to power things and access the intelligence, the artificial
intelligence that charges us to go forward. Why should we
care about all of the need for data centers beyond
just you know, Mark Zuckerberg saying he wants to put
up Manhattan City sized one somewhere in the US.

Speaker 2 (01:57):
Look, I think about AI and data centers a lot
like how I think about space more generally, and so
the fact that they are getting brought into some joint
conversation I think makes a lot of sense, which is
that in both of these situations, we're dealing with absolutely
transformational technologies where we can't really even predict where they're
going to end up. I mean, we can see some
of the near term applications. They're exciting, They bring value,
and that's both AI and space, but there's also huge
uncertainty about where they're lead. And that's actually part of
the promise of having market forces and you know, running
both of these sectors is that markets come up with
amazing creative ideas through individual entrepreneurs or companies in places
we can't predict today. And so, you know, you talk
about all the different ways to think about data centers.
I mean, I guess they're the beating heart of what
creates this AI revolution, whether it's the compute power at
scale or whatever you want to draw them to. Without them,
we can't have the kind of transformation that we're imagining.

Speaker 1 (02:56):
So the average American access is more than two dozen
times per day. Think about that, folks, more than two
times day every time you're on your phone. So if
you're on your phone more than twenty four times a day,
then you boost up the numbers. Your phone is connected
to a network in space, satellites and vice versa, your
banking system, sports scores, any information sharing that you're using. Obviously,
everything in our modern economy, everything is connected to outer space,
and protecting that domain is so vitally important. I'll be
honest with you, Matt. When I first heard that people
were starting to think about putting data centers on the Moon,
I thought of those images on the side of the
highway with all of those bins, those storage bins, and
I'm like, we're going to turn the Moon into that, Yeah,
you know, like bring you back, Frank Sinatra. But then
I thought about it, and when I thought about it
from like a satellite perspective, that we're already doing this,
we are information is already connected into space, it made
a lot more sense to me. Would the humans be
accessing the data centers where they be powering humanities reliance
on artificial intelligence, or would it be more to expand
our technology reach deeper into the Solar System or both?

Speaker 2 (04:15):
I suppose both. I think at first it would be
primarily about serving the earthly markets, so to speak. But
you're right that as we expand into space for various reasons,
whether it's the kind of dreams of settlement and space colonies,
or even just exploration or the resource minding we were
talking about on the previous episode, we're going to need
various capabilities in space at a scale that we haven't before,
whether that's communications or data processing or edge computing or power,
and so we're going to have to start building that
infrastructure up there in space. And actually, when you listen
to some of the leading space companies, that language of
infrastructure is a really key part of how they talk
about all of this. Let me just mention one other
things because you hit on something I think that's pretty
important to a lot of people, which is like, are
we going to turn the Moon into some sort of
industrial wasteland. Yeah, it's a really important question. I mean,
there actually is a treaty. We talked about how there
are now property rights in terms of resources in space,
but there's another treaty in space that says nobody can
claim sovereignty over any celestial body. So it's not like
we can say this is the new part of the
United States up on the Moon. We're going to put
data centers here. We have to work globally to figure
out how we're going to manage this incredible opportunity in
a way that benefits everybody, even those who feel very
strongly that the Moon and other places should be protected.

Speaker 1 (05:29):
But see, my gut is that that doesn't hold me.
I made I'm pessimistic, But to me, if they find
a piece of the Moon that is prime real estate
for building data centers. I think that nation's best interests
wore out to be blunt. I mean, there's a reason
the ISS isn't going to be up much longer. But
what is the biggest challenge of building data centers? Obviously
it's a little different than building a data center on
the Moon than it is to build one here on Earth.
What are some of the challenges hurdles that people like
you and scientists are thinking about.

Speaker 2 (06:03):
Well, I am not an expert on the building of
data centers, so I can only go so deep on this,
but I will I will. I will tell you that
the challenge of building anything in space, and you know,
there's been so many ideas, honestly, for the past half
century of activities we could do manufacturing on space stations,
R and D, resource mining, all this stuff. The biggest
challenge is always the same, which is that, first of all,
it has to be cheaper than it is space on Earth,
but it also has to be cheaper than it could
be on Earth over the same timeframe. And so often
people have these ideas that beat the earthly alternative, but
then twenty years later, when those space ideas are getting
finally developed. Something cheaper has been found on Earth, and
so we have to figure out how to build these
data centers in space if we're going to do it
at a truly affordable cost relative to the earthly one.
And it's not impossible given the rising costs of energy
or the demands for energy that will be needed and
so on. But that's I think going to be the
fundamental race.

Speaker 1 (06:57):
His name is Matthew winz Earl. He's the author of
the great new book Space to Grow, Unlocking the Final
Economic Frontier. How did you get into this topic? I mean,
someone with your background is but how did you become
a space nerd?

Speaker 2 (07:08):
Well? Most importantly, my dad and I watched every episode
of Star Trek Next Generation when I was a kid,
So there you go.

Speaker 1 (07:14):
That is amazing. That was that was for me. It
was I got a telescope. But but then, how did
you did you? Did you know as a kid that
the space industry was something that you wanted to follow? Kay?

Speaker 2 (07:25):
Yeah, no, that was that was fortunate. I got interested
in economics, and I teach economics here at HBS, and
I was interested in how the public and private sectors
work together in general, and then all of a sudden,
the space sector is getting revolutionized in exactly that place,
you know, with SpaceX and the evolving role of NASA,
et cetera. And so I dipped my toe into it,
got totally interested and have been studying it for the
last decade since.

Speaker 1 (07:49):
My final questions you on this topic is, you know,
there's a great science fiction book called The Book of
Strange New Things, which is when I read it, it
was it's a very literary book. It's not really sci
fi in the sense that it's not it's not like
Star Trek where things are blowing up and whatnot, which
I love. But this is more about how boring, for
lack of a better word, it would actually be to
work on another planet when you're one of the first
miners there. It's very much a refinery job, and it's
dangerous and it's monotonous. And it's a great book that
kind of asks those questions about what that would be
like for some a worker in that environment. As you
think through where we are and where we have been
in the past, even if you go back to the
first Industrial Revolution or even the settlers coming to America
and the types of people that the monarchy went after
to come over, and the deals that were made for
various different people historically, It is a big question. But
you're a smart guy, so I'll ask historically speaking like,
how would you compare where we are at the current
moment of the space economy to other exploratory phases that
we've had on planet Earth?

Speaker 2 (09:05):
Right? So I think that maybe one of the key differentiators.
It's a question that a lot of sci fi writers
and policy folks have thought a lot about, Right, who
are the folks who are going to sign up for
this What is the governance regime really going to look like?
How much will they be the types that would build
this cooperative future versus kind of the folks who are
willing to take the most risk for the most individual upside. Right,
There's all these really deep questions. I think one thing
that we have not really figured out yet is how
we understand individual risk taking in these endeavors. Right, because
we've done space through with government astronauts for the past
fifty years, where safety is the top priority, and a
lot of the exploration that was done in centuries past
was with people who died at tremendously high rates, taking
huge risks on their own behalf and maybe on their
government's behalf. I'm not saying we should do that, but
I am saying that I think we have a different
lens at some level on how much we want to
take those risks, and that is probably going to handicap
some of the speed with which people actually go up
into space. Maybe all for the better, but I think
that is a big difference.

Speaker 1 (10:11):
It's just fascinating to be able to talk to someone
who's teaching at HBS, who's the author of Space to
Grow and Locking the Final Economic Frontier, and it is
really on the front lines of helping to translate the
space economy, which lots of these companies aren't even public yet,
and they're having such a huge, huge presence in shaping
the future of our national security, our global security, and
the way that we all not just talk to one another,
but how our supply chains work that are going to
increasingly become various different data points. Thank you so much.
If people want to go and get the.

Speaker 2 (10:45):
Book, well, you can go to the Harvard Business Publishing
website at HBr dot org, or you can go to
Amazon or anywhere else where you can find it. Awesome
and I appreciate the book.

Speaker 1 (10:54):
Yeah, HBr dot org or Amazon or wherever else you
get your books. Thank you so much, Matt, and have
a great tomorrow today