Robinhood & Aetherflux Co-Founder Baiju Bhatt: It's Time To Commercialise Space

0:00Baiju Bhatt:I think if a civilization were to look at the Earth, say in 500 or 1000 years, it looks a lot like Saturn. A lot of this data centers in space and energy and space application is specifically going to exist in these dawn, dusk, sun-synchronous low-Earth orbits. Hello, and welcome to Giant Ideas with me, Cameron McLean. And me, Tommy Stadlin. We're co-founders of Giant Ventures, which builds and backs purpose-driven companies. At Giant, we're lucky to meet extraordinary people with giant ideas that are changing the world. This podcast brings you behind-the-scenes access to those ideas and the inspiring stories of the people behind them.

0:37We explore how one giant idea can kickstart a billion-dollar company, shape culture, and transform life as we know it. Today, we have a very special episode of the Giant Ideas podcast, something a little bit different. We are in Menlo Park recording live from Aetherflux's offices with none other than Baiju Bhatt, co-founder and CEO. Hi, man.

1:00Baiju Bhatt:We're in San Carlos, actually, but right next to Menlo Park. Yeah, close. What we got here on the walls here with the murals? Yes. So the concept behind this mural was George Washington crossing the Delaware. Okay. But I wanted to make it a little bit weirder. So it's George Washington crossing the Van Allen belts on a satellite. and the uh the creative direction that i gave was i wanted to be like a who's who of american presidents yes to avoid any politics we go back to the ones that you know that have that are no longer with us the legends uh not not the living legends and the prompt was i wanted all the uh the leaders to be shirtless and ripped and and i was like i wanted to be aggressively american and um we kind of had to settle on like no no no guns like actually let's make it aggressively american like hamburgers and like weightlifting amazing and so we've got george washington over there with lincoln and nikola tesla george washington is holding a hairless cat is that doctor a reference to dr evil uh no i think that was just a i really love cats i don't know about the hairless one Okay.

2:08It strikes me as like a pantheon of the American gods with a psychedelic twist in space.

2:14Baiju Bhatt:A little bit. Yeah, a little bit. The robotic American Eagle. And we've got Teddy Roosevelt over there riding a T-Rex. In the arena. Yeah, exactly. And a robotic shirtless Reagan just sort of looking down. It's inspiring. Well, today there was some leaked news that you may be raising a large financing round. Let's give our audience an overview of what your giant idea is. Yeah, would love to. So Aetherflux, the vision of the company is to build an energy grid in space. So we'll start out with kind of the idea behind it and then what the exact thing is. So I started the company with the idea of exactly this, that low Earth orbit was an emerging platform for commercial activity and the sort of scope of commercial activity on this platform i felt was pretty limited like this is you know kind of broad strokes but prior to this wave of industrialization it's been earth imaging it's been defense stuff and it's been telecommunications like that's kind of what's going on in space and i want to live in a world where the the space environment is not dominated by sort of like governments and nation states, but it should be a commercial environment.

3:34Baiju Bhatt:Because if we want a lot of people to be a part of the space economy, we need to have great jobs for people to do. And we need young people that are coming out of school to be like, yeah, that's what I want to do. I want to be in space. I want to be in space. I want to get a job working at a space company. And to do that, like we need to create opportunities that are purely commercial in space. And my thought process was that energy is the next industry that's going to exist in space, and triangulated that from a variety of reasons. One, that the component technology is reaching the right level of maturity.

4:07Baiju Bhatt:Two, some applications that I originally had, but this is kind of getting into where the vision of the company is going, new ones that are emerging. And also for any economy, energy is like one of the core ingredients. It's the core input, right? And so the vision of the company started out at first with pursuing these DoD applications, delivering power from space where it's either a contested environment, there's no existing power grid, or you're trying to send power somewhere that there's no real alternative to getting power. So think things like forward deployed bases, military locations, but also things like power to things in the atmosphere or power to other satellites.

4:50Baiju Bhatt:So that's how we started out. We're actually going to be doing space-based solar power, which, you know, this is not. Putting solar panels on satellites to generate energy in space. And then using lasers to transmit it. And actually, there's the very first one that's right over there. So you've got these satellites, they've got solar panels on them, and then you've got a laser that's going to beam that energy back to parts of Earth and potentially to the atmosphere or assets in space. Assets in space, GPUs, which would power them up. Exactly. So we did that, and about a year ago, I was thinking very critically about the sort of the techno-economics of energy in space, and the light bulb went off.

5:32Baiju Bhatt:that actually two things. Number one, the primary driver of energy use was going to be artificial intelligence. I think when I first started the company, that was a thought. As time went on, it became clear that this was kind of the driver, like second to none. The second one is that the energy economics of doing it in space, of harvesting power in space were very, very interesting. And I thought they unlocked an opportunity there that would be purely commercial in nature. So about a year ago, started working on the concept of solar powered data center satellites. And now I can say that that's, you know, one of the major focuses of what we're doing.

6:11Baiju Bhatt:Okay. That's kind of the direction that we're taking the commercial. It's heating up that space. Yeah, it is. It is. There's a lot more activity, which frankly is awesome. Yeah. It's much better that people coalesce around a set of ideas and pursue it. And we obviously think that we have a very good path towards being a major player here. We think there's going to be other people that are also going to be successful doing this. It's definitely not a winner takes all. No, I mean, I really don't think so. So I wanted to get into the technical unique economics because that's a really interesting topic.

6:42But before we do that, let's assume that things go as well as we could possibly imagine. What's the most outrageous vision of the space future you could see? Because this literally will sound like sci-fi to a lot of people. And I think the first articulation of this idea, solar panels energy in space actually was is an eye in an isaac asimov novel right in the 1940s 50s it's about like robots in space too it's kind of all converging on that idea converges

7:05Baiju Bhatt:like what's the most wild wild future we can imagine um so i think it's literally rings around the planet okay i think if civilization were to look at the earth say in 500 or a thousand years it looks a lot like Saturn. And why do I think that is? It's because I think a lot of this data centers in space and energy and space application is specifically going to exist in these dawn-dusk, sun-synchronous low-Earth orbits. Like, that's kind of a... And one of my early thoughts on this is that those particular orbits are kind of magical because they're still within low-Earth orbit, and so you're not in, like, the extremely harsh radiation environment.

7:49Baiju Bhatt:sort of in geostationary or beyond. Still a relatively harsh radiation environment, but you can have nearly continuous illumination by the sun. And so it's kind of like the best of many worlds. Yeah. And so I think you're literally going to see rings around the planet because I think these orbits are going to be very densely populated. And I think as humans, we'll look up and we'll be like, oh, that's where the computers are. Amazing. Yeah. Amazing. is that audacious enough it is it is audacious and i guess people going up there regularly to do whatever we can do in space potentially yeah yeah um okay so the technical economics there are a lot of people who are very bullish on this yeah yeah elon's obviously kind of very vocal about it yeah there's some people who are pretty skeptical who think that it's hard to kind of square the math that it's very hard to service gpus this particular data center in space i think it's It's very hard to service GPUs in space.

8:45Cooling is a huge issue in space. We are assuming that the cost of launch is going to continue to come down. But nonetheless, it's going to be very hard to just beat the economics of data centers on Earth. What do you think about all of that?

8:59Baiju Bhatt:Number one, I think there is a path to having competitive unit economics. There's going to be a bunch of different approaches that different people take to it. We have one approach that we'll be talking about in the not-too-distant future that kind of shows what our approach to this is going to be. I think the fundamental thing that we're looking for, at least there, is the cost per GPU hour and benchmarking that against what people pay on Earth. And can you get that cost competitive? and the real value proposition of this I think over the next five to seven years is going to be the demand for AI compute is there's no world in which I see this slowing down I have a great sound someone who works very closely with the CEO of DeepMind told me that if they could get 10x the data center capacity tomorrow they would have demand for it immediately I don't disbelieve that at all I thought that was pretty amazing from Google.

9:57Baiju Bhatt:I mean, it's, again, there's a lot of different ways history can play out, and this is one viewpoint. But when you just look at how much stuff we could be doing with that, and kind of when you think about AI at scale serving the whole population of the planet, you're like, yeah, you can see a world where every one of us has multiple agents or AIs that are running in the background, like, nearly continuously. Sure. and just soaking up GPUs and using more and more energy and higher, higher sort of like performance GPUs to get more and more sophisticated with things that we're doing. And right now you just can't do that, right?

10:37Like you just can't. And you have a very exciting announcement in the video, right?

10:41Baiju Bhatt:Yes, that's absolutely right. We are excited to be partnering with them on this. And we've talked about the announcement there, but I think taking a step back there, the cool thing about this kind of connects to the point that you made earlier that there is competition here which is that people care about this right there's a world in which we i guess in a space in which we have to do this where we are sort of like pioneering making these chipsets work in space which is frankly a lot harder than having the sort of you know the the company that makes them being like yeah no we're committing to actually supporting this we want to grow this as a business model.

11:20And so it actually fundamentally makes us more applicable to a broader set of potential buyers in the future. And it kind of shows that as the GPUs on Earth are getting better, there's going to be work that's happening in the background

11:35Baiju Bhatt:to get a parallel path, ideally, of space-rated ones that are getting better too. Do you think that's the end state kind of in 10, 20 years? Or do you think that's a reality that we're going to see in the next kind of two to three years as some of the most bullish projections? Yeah, I think the two to five-year time frame. Two to five year time frame? Okay. And on the kind of pure, I don't think we have to wait 10 years. No, 10 years. Okay. No, I don't think so. And what do you think of some of the competition in the industry? What's your take on it? We've got StarCloud. I think they announced the round yesterday.

12:03Obviously, SpaceX is doing this thing.

12:05Baiju Bhatt:It's awesome. Really proud that they really do that. Yeah. We've got Google. We've got Eric Schmidt, I think, doing stuff. Jeff Bezos. What's your kind of take on the whole space? Man, there's a lot of very successful people that built huge companies I was going to say, it seems to be the ride of passage. If you're one of the most successful entrepreneurs in the world, you must build a space data center company. Yeah, I guess so. No, it's, you know, specifically talking about Bezos, Elon and those folks. It's really awesome to see the sort of biggest space companies in the world committing to this.

12:40Baiju Bhatt:The thought that comes to my mind here is like kind of comes back to this commercialization thing, which is if you look at the total commercial envelope of space, the total dollars being spent for commercial use is not that big. And when you put that next to the dollars that are going to be spent on AI and infrastructure build over the next decade, it's trillions and trillions of dollars. The reality in which some part of that then flows to developing the space economy like let me let me be really emphatic about this like this is a once this is the first time this has happened at this scale like there's a reason that everybody that's working on space is like oh yeah like that's a unseen scale because the thing that has limited the space industry has been that it's really expensive and it's super capital intensive and it it's on a bit of an island of how capital and sort of like resource intensive it is to do it.

13:46Baiju Bhatt:Now, if you can have even a small percentage of that, of the spend on AI and the build out of AI, drive the commercialization and build out of space, like having a vibrant space ecosystem is going to be a byproduct of this. Like it's a really, really big deal. And again, I can't stress this enough, like the commercial opportunities in space before this have been few and far between like it's people looking for what are the commercial uses for heavy launch vehicles and stuff like that i mean this is like it doesn't get bigger than no the you know the projected dollars that are going to be spent on ai and i guess one of the blockers here is just how hard it is actually to get data centers connected to the grid yeah um just kind of getting permits to build that's all kind of a huge blocker here to acceleration.

14:37Baiju Bhatt:And the timeframe on that stuff is ballooning. Right. Yeah, exponentially. And I think that is actually the sort of like real concrete problem that space data centers at scale will solve. Is you can go from like, if you have two options, right? One is you got a truck full of GPUs. You can drive them to a construction site where you're building a data center, or you can drive them to our site where we integrate them into a space vehicle that's going to then put them in orbit, right? On one path, it's going to be, we know how long it takes. It's pushing, you know, five years in many cases domestically, less in other ones, more sometimes abroad, versus you take those same chips, you can integrate them into a vehicle, into satellites, get them to the launch pad, have them up in space, ideally in a matter of weeks.

15:32Baiju Bhatt:Incredible. And the reason is because you're taking the process by which they're made, which is industrial manufacturing, and you're solving the congestion problem by having the process by which they come online not be a real estate and permitting problem or like a real estate construction energy grid problem. Tech problem. It becomes a manufacturing problem. Okay. Okay. And I guess the limiting factor here could be the rate and cost of launch. Yes. So how do you think about that? Obviously, there's kind of one game in town at the moment. Correct. Which is SpaceX and Elon. I know you've already, I think, booked your initial launch.

16:09Baiju Bhatt:We've got a couple of things in there that are going to be going up. There we go. But how do you think about that dynamic? I think it's going to be really interesting to see how it plays out. I think there's going to be a lot of new companies that are entering the launch capability game. I think the ones that have been doing this for a long time are building truly spectacular vehicles that if we can see those things sort of live up to their potential, there's going to be a ton of mass going to orbit okay every you know week month etc etc so i think this is actually one of the really important limiting factors for this space reality becoming a thing yeah clearly yeah yeah because i think that maybe the the negative view could be that he you know they could keep the cost of launch at a place where it makes sense for them to do their activities but not for others right yeah that would be that's certainly possible possible okay well listen one of the things that initially um attracted us uh so much to your idea was this idea of abundant clean energy right it wasn't the mustache well the mustache was part of it the the music history was also part of it there were there were a couple things the hair was a big play okay good um but uh always always a fan of someone trying to bring clean clean abundant energy to the world as well so um so how do you think about uh that part of your business uh which i I guess was the initial wedge in some ways.

17:29Renewables and storage are becoming pretty cost effective here on Earth, which is awesome. How do you think about the cost of energy that you'll be delivering through your platform?

17:41Baiju Bhatt:So I think it's two things. So I think the cost of energy when it's used in space should be fundamentally much, much, much lower. And I think using the energy in space unlocks a much broader spectrum of like commercially competitive opportunities. When we think about delivering power from space to Earth or somewhere else, what we're effectively doing is we're collecting the power with solar panels, either storing it in batteries or directly sending it to little, you know, like a series of lasers in space that then combine all the laser power and then point it somewhere. Or once you send it somewhere, you again have solar panels that are in this case tuned specifically for that laser light that reconverted back into electricity.

18:27That's how you reduce the loss on the way.

18:28Baiju Bhatt:Well, that's how you re-harvest the energy when you deliver it somewhere. And when you're projecting the power, our view, our approach to this is actually to use higher efficiency receivers for when you're converting the laser light down and using more general purpose solar panels when you're just trying to collect a bulk of power. Okay. Yeah. But I think it unlocks the ability to get power in places that there's really not a lot of great alternatives. And I think that in the case of renewable energy and such, like one of the initial thoughts behind this was actually understanding the way in which fuel from the U.S.

19:09Baiju Bhatt:government is set to different battlefield locations or places where the Department of Defense, previously now Department of War, need energy. and the bread and butter of this is diesel fuel. Like that's kind of how we power our forward operating bases and such today. So that might be an initial customer for it. Yeah. And so I think augmenting those capabilities where we can use the sort of hydrocarbon-based fuel for the things where you kind of have to use hydrocarbon-based fuel, I think is an interesting way to augment the energy use. And I think the fact that it's solar power is frankly a very pleasant extra to the fact that it should ideally be useful in places you just can't do it otherwise.

19:54Okay. We're going to nerd out for a bit. What are some design choices you've made for the current product that you think enable what you're doing?

20:02Baiju Bhatt:Oh, this is on the power beaming side. Good question. So the first thing that's going up is actually a relatively subscale demonstration. And so a lot of the trade space that's gone into it is how do we maximize the performance of the power transmission system, given the limitations of the total volume and mass of the satellite? Because the first mission on this is going to be a ride-sharing mission. So a lot of it has to do with sort of the pointing and tracking. How do you transmit power? How does the receiver know that it's got power? How does it communicate back to the satellite that it's receiving power?

20:44Baiju Bhatt:What is the cutoff mechanism? And so we're doing some pretty novel things with things like unpowered receivers using reflective optics to signal back to the satellite that this is how it knows it's on the target. Amazing. Yeah, so some pretty interesting stuff. Ways of harvesting the light on the ground where you're able to concentrate the light potentially and use higher efficiency receiver cells potentially operating at higher temperatures. I'm sure people will love an insight. How do you come up with that stuff as a team? Is it iterative process? Is it top-down kind of first principles physics?

21:24How do you... Look at it both.

21:26Baiju Bhatt:I got to say, one of the parts of this that's been really fun for me is, and we haven't talked about this yet, but my, like, what is my background coming to this? Like, I'm a physicist and a mathematician by training and a finance bro by trade. And your father was a NASA too, right? My father was a scientist working at NASA Langley. Yeah. Amazing. So like, how do these different skills translate to this? There's a, there's a big hole in the middle there, as I've kind of discovered, which is industrial manufacturing, applied physics, sort of frontier technology, all of these things. I'll just give you an example, right?

22:01Baiju Bhatt:how do lasers work? Like how do you generate, you know, kilowatt class laser power output? I mean, I've studied lasers in the context of Stanford Physics Lab. It's a bit different. But, you know, that doesn't necessarily tell you how these industrial applications work. So it's been fun to kind of learn where the frontier of technology is, being like how much of this stuff is in the lab versus do people actually make this stuff, and buy it, you know, and can we iterate on it? And a lot of what goes on behind the scenes here is us buying components and breaking them, buying more components and breaking them, breaking them and breaking them and breaking them and seeing which ones survive, which ones can survive TVAC radiation environments, vibration tests, kind of the full gamut of like, you know, torture therapy for electronics.

22:58So this is really like your dream come true in many ways. Yeah, it's really fun. Okay, very cool. I also read that you built a car during COVID.

23:06Baiju Bhatt:I did, yeah. So this is like that 10x, I guess, 100x. I mean, you love cars. I do love cars. You love building things. I love building things.