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The problem is that experiments into this by Google have concluded that radiation hardening is unnecessary. HBM memory far surpassed their expectations for survival, exceeding 5 years in their simulated proton beam on earth. Localized shielding for consumer equipment is more than enough, especially combined with ECC.

Solar power and power dissipation are similarly solvable. The only bottleneck currently is launch costs which is why it’s expected around 2030 is when these DCs will explode

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> Solar power and power dissipation are similarly solvable

So it is not outright stupid, just has a few extra costs.

So again, what's the economical benefit? Because you surely have no power and dissipation problem down on Earth, so why add a whole rocket launch into the equation? Because big fire goes brr?

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The PV at least can potentially be much less robust than on Earth, since it doesn't have to contend with wind and weather. CdTe thin films, for example, can be just 1 micron thick (the absorption length of solar photons in that material is ~0.1 microns). So potentially the material cost of space PV can be much less than the same peak power PV on Earth.
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The bet that they are making is that, in the near-future, energy on Earth will be such an issue (especially if you want to scale) that DCs on Earth will cost more than components + launch costs
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Why would energy be an issue? The Sun is shining, wind is blowing, the ocean has waves, nuclear is nuclear. All of these will just get more efficient in using the same constant resource.
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It's difficult to imagine any sort of compute in space given the state of the art rad hardened processor is about as fast as a computer Apple sold in 1998.
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You don’t have to imagine. The starlink constellation is a working and profitable massive deployment of orbital compute. (It doesn’t use rad hardened hardware as far as I can tell)
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Starlink is impressive but calling it compute is a stretch.

It's not that far off from a residential router with a bigger antenna.

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Starlink satellites have such a low orbit that they experience non-negligible atmospheric drag, which is why they have to be replaced at such a rapid rate. All proposals for orbital datacenters propose placing them in sun-synchronous orbits for maximum solar exposure, which puts them right at the edge of the Van Allen Belt at best, meaning they'd be exposed to dramatically more radiation than a Starlink satellite.
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Musk's "genius idea" there was to (pardon the pun) derail high speed rail and other similar investments so he could sell more cars.

What are Hyperloop/Boring actually doing now? It doesn't take that much investment to human-drive a 10-20 Teslas up and down the Vegas Strip in a straight tunnel at normal speeds.

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