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>you get solar power 24/7 and the latency to earth is just a few ms.

Not at the same time. To have few-ms latency you need to be in/below LEO, but then earth blocks the sun half the time.

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It can be done in a dawn-dusk, sun synchronous orbit, less than 1000 km up.
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Low Earth orbit is 90 to 120 minutes, depending on altitude. Even if the satellite is currently close to you, it will soon be on the other side of the world.

Assuming that orbital data centers make sense, it will be an interesting challenge to figure out how to best mitigate that. Short tasks that require little data will be easy, but everything else needs rethinking. Can you tolerate variable latency? Should you duplicate the data across many satellites? Or should the data constantly migrate from satellite to satellite?

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That’s at least 20 ms of round trip time, realistically much more. Especially since it’s not geostationary so the distance to the closest ground station will in most cases be much longer than straight down. I would be surprised if the average ping is below 100 ms.

Probably still fine for most applications though.

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Latency isn't really the issue here (lots of inference serving happening across oceans, which is probably 100-150ms RT), but bandwidth ends up becoming an issue for large scale transfers (mostly model weights, not the actual inference tokens/queries).
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With laser terminals you’ll get a few gigabits per second. That’s possible both between sats and to the ground station. Probably not cheap though.
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Why are you ignoring all of the costs of actually being in orbit here?

A normal satellite runs something similar to 1U worth of computer and costs roughly what you quoted in total...

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Why are you guys rehashing the exact calculations that were made in the article? The article is all about these calculations, and they give ranges of values for each cost to see the the possible price points for everything in order to make it worthwhile.

They take all of the bits you guys are talking about into account in the article. You might disagree with some of the numbers, I guess, but that doesn't seem to be what you guys are talking about.

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Finding land/power/space to do a _single_ rack is not hard as ~every office building in America has 200kW of extra power and HVAC water at ~25C. Plus it only costs $4-5k to stick that $5M rack in the back of a truck to drive it there. No permits, easy maintenance, stable network connectivity.

Why use a satellite to do what your IT closet can already do?

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People are fudging orders of magnitude because it sounds cool and they are stupid.
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