Baker says xAI built a 100,000 GPU cluster with Elon rearchitecting the Memphis data center from first principles.
“And I would say with Elon's unique physical engineering mind, which we've seen play out at SpaceX and Tesla, and now at Neuralink, where he figured out how to miniaturize everything along with really capable teams. I think he rearchitected the x AI data center from first principles in Memphis.”
Baker says xAI built a 100,000 GPU cluster using Elon's physical engineering approach from SpaceX and Tesla.
“x AI decided they were gonna build a 100,000 GPU cluster. And I would say with Elon's unique physical engineering mind, which we've seen play out at SpaceX and Tesla, and now at Neuralink, where he figured out how to miniaturize everything along with really capable teams.”
Baker says xAI built a 100,000 GPU cluster using Elon's physical engineering approach from SpaceX and Tesla.
“And I would say with Elon's unique physical engineering mind, which we've seen play out at SpaceX and Tesla, and now at Neuralink, where he figured out how to miniaturize everything”
Baker predicts data centers in space will be the most important development in three to four years.
“I think the most important thing that's going to happen in the world, in this world, in the next three to four years is data centers in space.”
Baker predicts terrestrial data center buildout will stop within seven years, causing pain for power and cooling companies.
“And the years leading up to that are gonna be very painful for a lot of the companies and the power cooling spaces, you know, these industrial names,”
“What happens when 5% of the world's population is using these models the way the cutting edge 10 basis points are? Like, it's just it's unimaginable. This is why orbital compute is a necessity.”
Baker predicts orbital compute becomes economically viable in two years and takes meaningful share by decade end.
“think on it becomes clear that it is possible, going to work, and economical in the next two years. I think it starts to take meaningful share towards the end of this decade.”
Baker predicts within seven years we may stop building terrestrial data centers, causing pain for infrastructure companies beforehand.
“But I can't imagine a day when in the next seven years, when we never build another terrestrial data center. Mhmm.”
Baker predicts orbital compute will solve power shortages in five to seven years but wafer shortages will persist longer.
“We're gonna address the watt shortages with orbital compute for sure in the next five to seven years. But the wafer shortage, I think, is going to persist for a long time.”
Baker describes orbital compute as Blackwell-sized racks in space with 500-foot solar wings in sun-synchronous orbit.
“It has these solar wings that are probably 500 feet long on each side. You keep it in a sun synchronous orbit.”
Baker predicts Musk will build Taiwan town, Japan town, and Koreatown near TerraFab to recruit top engineers.
“And then we'll have Japan town, same thing. We're going to have Koreatown. We're going to have all these things exactly dialed to recruit the best engineers.”
Baker reveals SpaceX and Tesla are building world's largest fab in America with Intel partnership access.
“It's a SpaceX, I believe Tesla's involved as well, joint venture to build the world's largest fab here in America. I think they're going to be successful.”
Baker specifies orbital compute is rack-sized satellites weighing 3,000 pounds, not building-sized data centers in space.
“A black well rack weighs 3,000 pounds. It's eight feet high. It's four feet deep, three feet wide. It's racks in space and SpaceX has showed you an illustration and it's a rack.”
Baker describes orbital compute as Blackwell-sized racks in space with 500-foot solar wings, not giant data centers.
“It's eight feet high. It's four feet deep, three feet wide. It's racks in space and SpaceX has showed you an illustration and it's a rack.”
Baker explains Meta's compute rental was inspired by SpaceX selling clusters at massive premiums to contracted rates.
“What it was is they saw SpaceX have a big installed base of compute and sell some big trading optimized clusters into the market at a truly massive premium to these contracted rates.”
Baker cites report that SpaceX plans to bring on eight gigawatts of compute in eighteen months, calling it incredible.
“A Substack writer will fund the AI. They think that SpaceX is gonna try and bring on eight gigawatts of compute over the next eighteen months.”
Baker calculates eight gigawatts at $50B per gigawatt implies $400B revenue versus $73B consensus for SpaceX.
“If they bring on anywhere near that, the consensus estimate is 73,000,000,000. That's eight gigs at 50,000,000,000 a gig. And, obviously, that would not all be lit up at the beginning of twenty seven.”
Baker reports Funder AI believes SpaceX will attempt to bring on eight gigawatts of compute.
“a, you know, a substack writer will fund a fund a AI. They think that SpaceX is gonna try and bring on eight gigawatts of compute.”
Baker notes SpaceX added massive compute capacity instantly without any market price impact.
“they put a vast amount of compute into the market overnight, and it wasn't even really a blip. It was like the market just utterly absorbed it.”
Baker estimates SpaceX monetizes compute at $50B per gigawatt versus $73B consensus, with Grok and Cursor hitting $10B ARR quickly.
“And they're monetizing at something like 50,000,000,000 a gig and consensus estimates for next year are 73,000,000,000. So forget Starlink v three, forget Starlink direct to sell, Grok 4.5 and Cursor.”
Baker cites report SpaceX plans eight gigawatts of compute, calling it incredible, with rates up not down.
“They think that SpaceX is gonna try and bring on eight gigawatts of compute. I will never bet against Elon, but, I mean, that would be a truly incredible feat.”
Baker notes SpaceX brought on over 500 megawatts annually, matching only hyperscalers, CoreWeave, and Crusoe, versus $73B consensus estimate.
“But to this day, the only companies that have brought on more than 500 megawatts of power in a year are the hyperscalers, Coraweave, Crusoe, and SpaceX.”
Baker suggests Elon Musk has big role in this case
“@Alfred_Lin In this case I would think @elonmusk has a big role”
Baker says SpaceX remains unique and has significant future ahead despite current achievements.
“There's only one SpaceX. To quote Bill Belichick, you know, it's on to Cincinnati. Got it and there's a lot I think ahead for SpaceX. So the SpaceX story isn't over.”
Baker says Fireworks and Baseten are two largest inference clouds and first time seeing SpaceXAI on fastest growing list
“Fireworks and Baseten are the two largest inference clouds and I think of them as *an* index for open-source AI adoption. Also first time seeing SpaceXAI on the list of “fastest growing” IIRC. SambaNova! Will wonders never cease. https://t.co/HlmFsKRtVk”
Baker advises a founder not to publicly complain about VC criticism and to focus on execution, referencing Starlink
“@PhilipJohnston Literally don’t even post about it. Move on. You are getting Starlink lasers for a reason.”