ARK Invest CEO Cathie Wood says orbital data centers could take SpaceX revenue 10 to 20 times higher than existing models.

Orbital Data Centers The Game Changer

Wood explained that ARK’s preliminary work on orbital data centers suggests this business line could dwarf current SpaceX revenue projections by orders of magnitude.

“We have not added data centers, orbital data centers in,” Wood told Bloomberg. 

“However, our preliminary work suggests that that part of the business could take SpaceX from a revenue generation point of view, orders of magnitude higher. Ten, 20 times higher,” she added.

Elon Musk’s experience in Memphis, Tennessee, and Mississippi informed the orbital data center strategy. 

Memphis residents pushed back against data centers, complaining about increased electricity prices and land use. Musk won’t face those “not in my backyard” issues in space.

SpaceX Is ARK’s Largest Venture Position

SpaceX is the largest position in ARK’s venture fund, which has scaled north of $850 million. Wood noted that demand is voracious, with investors actively seeking space exposure.

Wood expects a supply-demand imbalance at the IPO, predicting an initial pop followed by volatility. ARK already published a SpaceX model on its website but hasn’t incorporated orbital data centers yet.

Vertical Integration The Elon Playbook

Musk told Wood about six months ago that his companies are converging more than even he understood. Tesla (NASDAQ:TSLA), SpaceX, and other Musk ventures are moving toward incredible vertical integration.

“In the new world or to create the new world, a company has to be vertically integrated,” Wood stated. Musk is moving data centers into space as part of this strategy.

Wood explained that when a company breaks new ground and invents something, the supply chain often doesn’t exist. Musk sets aggressive timeframes to get employees and the supply chain focused because when he moves, he moves fast.

Earth Data Centers Won’t Become Obsolete

Wood addressed whether orbital data centers make current Earth-based data center buildout a bubble.

She believes the technology revolution will dwarf the industrial revolution by far, meaning both orbital and Earth-based data centers will be needed.

“We think we’re going to need all of this,” Wood concluded, dismissing concerns about a 1999-style bubble forming in data center infrastructure.

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