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Podcast: Rocket Lab's Peter Beck and Adam Spice Discuss Neutron, Space Systems, and Strategy

Rocket Lab CEO Peter Beck and CFO Adam Spice continue the post-earnings release podcast rounds with an appearance on Dave G Investing. Some key takeaways from both:

Peter Beck

  • Building a rocket is a challenging process, with much of the work going into infrastructure, factories, and test facilities, not just the rocket itself.
  • Design for Neutron prioritizes affordability and reusability, with tradeoffs made to optimize performance and cost.
  • Block upgrades for Neutron will likely follow a similar path to Electron, focusing on incremental improvements rather than major redesigns.
  • Rocket Lab’s composite structures are a core strength, and the company has organized a new business unit to leverage this capability.
  • The space industry is at an inflection point, with vertically integrated companies like SpaceX and Rocket Lab positioned to become the dominant players in the future while existing primes are stepping back.
  • Rocket Lab is producing more than 2,000 reaction wheels this year.
  • Beck on the minimal impact that an Electron customer delay has on revenue: “Just so people understand that from a financial standpoint we collect 90% of all of the the launch contract prior to ignition so there’s generally only 10% of the contract left when we ignite the rocket and as the rocket is being built you know we’re collecting against milestones along the way so there’s never any like rocket sitting there that that owes us a heap of money.”

Adam Spice

  • Neutron’s margin profile is expected to improve more quickly than Electron’s due to its reusability being designed from the start.
  • The investment in Neutron’s manufacturing facilities, such as the composite facility in Maryland, can benefit other parts of the business.
  • The Space Systems side of the business is less capital-intensive than the rocket side, and Rocket Lab has invested in its manufacturing footprint and systems to enable scalability.
  • Government business, particularly opportunities like the Space Development Agency (SDA) platform, represents a significant growth opportunity for the company.
  • Sinclair’s reaction wheel production has scaled from 150 a year to thousands since being acquired by Rocket Lab, creating significant opportunities for increased margin.

Both Beck and Spice emphasized Rocket Lab’s long-term vision of becoming an end-to-end space company, with vertical integration and the ability to provide complete space-based solutions to customers. They additionally highlighted the company’s focus on execution, delivery, and transparency as key differentiators in the evolving space industry.

Podcast: Peter Beck on Q1 Earnings, Neutron, and Rocket Lab's Vertical Integration Strategy

In a recent appearance on the Vince is Bullish podcast, Rocket Lab CEO Peter Beck discussed the company’s Q1 earnings and provided insights into its future plans and the space industry as a whole. Here are the key takeaways from the interview:

  • Launch manifest flexibility: Beck emphasized that launch delays and rescheduling are common in the industry and that Rocket Lab’s diversified business helps mitigate the financial impact of such changes.
  • Neutron rocket contracts: Rocket Lab plans to sign Neutron launch contracts once the rocket is close to its first flight, ensuring they can meet customer demands and secure the best pricing.
  • Neutron’s target customers: The rocket is designed to serve a wide range of customers, including mega-constellation operators, government agencies, and other commercial entities.
  • “I fully predict that 50% of Neutron launches will be other people’s and 50% of Neutron launches will be ourselves.”
  • Vertical integration and acquisitions: Rocket Lab pursues vertical integration when the supply chain is too slow or expensive. Acquisitions are made to secure strategically important capabilities or to create synergies with existing business lines.
  • Competing with SpaceX: Beck believes that the space industry will be dominated by companies with their own launch capabilities, like SpaceX and Rocket Lab. He sees Neutron as a medium-class launcher complementing Electron, serving different market segments than Starship.
  • Future vision: Rocket Lab aims to become an end-to-end space company, providing not just launch services and satellite manufacturing but also complete space-based solutions and services to customers.

Beck’s podcast appearance highlights Rocket Lab’s ambitious long-term vision and strategic positioning within the rapidly evolving space industry. Through vertical integration, strategic acquisitions, and the development of the Neutron rocket, the company is actively working towards becoming an end-to-end space solutions provider. Beck’s insights reveal his unwavering commitment to playing a pivotal role in shaping the future of spaceflight, as he lays the groundwork to capitalize on the limitless opportunities that lie ahead in the space sector and positions Rocket Lab to be a multi-generational space company.

Rocket Lab Analysis Worth Tracking

If you track the Rocket Lab community on Twitter you have likely already run across detailed analysis of the company by @Tim_X94. If not, I highly recommend that you give some of his more substantial posts a read and give him a follow. Looking beyond the exciting “space stuff”, he dives deep into Rocket Lab’s strategic positioning, capital efficiency, and relentless execution - themes that resonate with my own analysis of the company.

I reached out to him today and asked him to round up a few highlights for this post:

  • TIm discusses Rocket Lab’s acquisition of a former Lockheed Martin facility in Middle River, Maryland, which will serve as a key component in the company’s vertical integration strategy. The facility, called the Space Structures Complex, will not only be used for Neutron rocket production but also for manufacturing satellite constellations, such as the potential SDA PWSA Tranche 3 orders and other large-scale contracts similar to the MDA Globalstar deal. The author emphasizes that the close proximity of the facility to the Neutron launch pad in Wallops will significantly improve Rocket Lab’s supply chain, logistics, and launch cadence in the long term, underpinning the company’s end-to-end space solutions approach.

  • Tim highlights Rocket Lab’s strategic decision to utilize NASA’s Stennis Space Center’s A-3 Test Stand for testing their Archimedes engine, which was built by NASA for $349 million but never used until now. This move demonstrates Rocket Lab’s capital efficiency and execution, as they secured a favorable lease rate and accelerated the development timeline for the Neutron rocket, giving them a competitive edge over their rivals, such as Relativity Space, who are investing heavily in redeveloping older test stands.

  • This thread digs into why Rocket Lab’s private launch site in Mahia, New Zealand, provides a significant competitive advantage over U.S. small launch competitors, as it offers superior flexibility, high launch cadence capabilities, and lower labor costs, all of which are protected by the regulatory moat of ITAR (International Traffic in Arms Regulations), making it difficult for competitors to replicate Rocket Lab’s launch infrastructure.

  • Tim asserts that Rocket Lab’s Electron rocket has the necessary ingredients to maintain its position as the low-cost small launch leader in 2030 and beyond, particularly for U.S. single missions with payloads under 300kg, due to its competitive launch costs, high cadence capabilities, unique regulatory advantages, and lower labor costs in New Zealand, while facing more competition in the small constellation launch market from larger payload capacity rockets.

  • In this series of tweets, Tim argues that while SpaceX’s Starship is expected to dominate the launch vehicle market with its capabilities and low launch costs, it will not make Rocket Lab’s Neutron obsolete in the short or long term due to Neutron’s competitive launch costs, the need for multiple launch providers to address the current shortage, and the U.S. government’s desire to avoid relying solely on Elon Musk’s companies for critical space infrastructure.

  • Tim argues that Rocket Lab’s strategic focus on providing bespoke turnkey solutions, including launch, satellite manufacturing, and operation services, for the U.S. government’s defense programs will allow the company to significantly grow its business and differentiate itself from competitors like SpaceX.

  • Tim details why he believes that Rocket Lab is poised to win significant U.S. government contracts for the Space Development Agency’s Proliferated Warfighter Space Architecture (SDA PWSA) Tranche 3 satellites due to its vertical integration, ability to meet schedules, and in-house satellite bus manufacturing capabilities, while legacy defense prime contractors face supply chain issues and challenges adapting to the new paradigm of small satellite constellations.

U.S. and New Zealand Strengthen Space Cooperation with Inaugural Bilateral Space Dialogue

On April 12, 2024, the United States and New Zealand held their first bilateral Space Dialogue in Washington, D.C., marking a significant milestone in the 150th anniversary of their space relationship. The key outcomes of the dialogue include:

  • Emphasis on the growth of the commercial space sector and the changing role of government in commercial space activities
  • Intent to continue cooperation on issues such as launch, payloads, and space situational awareness
  • Potential for expanded cooperation on policy and regulatory interoperability related to commercial space
  • Discussions on opportunities to advance scientific education, research, and space cooperation
  • Recognition of New Zealand’s geographic advantages in enabling frequent and responsive launches for U.S. industry and government agencies which added “strategic resilience” to launch capacity
  • Signing of an updated Memorandum of Cooperation between the New Zealand Space Agency and the Federal Aviation Administration
  • Announcement of the first round of joint research projects between New Zealand research institutes and NASA centers, focusing on Earth observation
  • Appreciation for the internship opportunities provided by NASA and the NASA Jet Propulsion Laboratory to high-achieving New Zealand students
  • Launch of MethaneSAT, a unique partnership involving government, non-profit, academic, and commercial organizations from both countries

The dialogue also included a commercial roundtable, co-chaired by the New Zealand Minister for Space and the Director of the U.S. Department of Commerce’s Office of Space Commerce, which highlighted existing partnerships and opportunities for stronger bilateral cooperation between the two countries' commercial space sectors. You can read the full statement on the U.S. State Department’s website.

DoD Moves to Boost Production Of Critical Componenets For Space Solar

Moving industry, defense, services, and people, to space requires a lot of supply chain logistics work on Earth:

The Defense Department announced April 16 it awarded a $14.4 million contract to semiconductor manufacturer 5N Plus to boost production of space-qualified materials for solar cells.

…According to market studies, demand for solar power for space applications is rapidly accelerating and expected to exceed current available capacity.

Relativity Space Pushes NSSL Bid To Next Year

Terran R won’t be ready but they expect to have a credible path to flight by next year:

Relativity was initially aiming to compete for the first round of NSSL Phase 3 contracts expected to be awarded later this year. However, the California-based company’s new Terran R rocket won’t fly until 2026 at the earliest, which falls outside the timeframe for this year’s NSSL Phase 3 awards.

“We’ve been fairly transparent with our schedule over the last year and have continued to hit our milestones,” Joshua Brost, vice president of business development at Relativity Space, told SpaceNews. “We’re very comfortable about on-ramping to NSSL in the future, likely next year as we approach that 12 months from initial launch.”

Rocket Lab Takes Significant Step Towards Reusable Electron Rocket

A Recovered Electron Booster Floating in the Ocean.

Rocket Lab, a leading small satellite launch provider, has announced a major milestone in its quest to make its Electron rocket the world’s first reusable small orbital launch vehicle. Here are the key points:

  • A previously flown Electron first stage from the January 2024 “Four of a Kind” mission has been returned to Rocket Lab’s production line for final acceptance testing and eventual reflight.
  • The stage has already passed rigorous tests, including tank pressurization, helium leak checks, and carbon fiber structural testing.
  • Rocket Lab has been successfully recovering Electron first stages from previous missions, returning them to Earth under parachutes and collecting them from the ocean.

The company has made iterative modifications across multiple recovery missions to perfect the recovery process, including:

  • Ensuring the rocket’s carbon composite structure survives the intense heat and forces of reentry
  • Refining the parachute system for reliable deployment and smooth deceleration
  • Improving telemetry and tracking for rapid stage location and collection
  • Successfully launching a previously flown Rutherford engine

If the stage passes final acceptance and qualification testing, Rocket Lab will consider opportunities for reflying it in the new year.

This milestone marks an exciting step forward in Rocket Lab’s efforts to increase launch cadence and reduce costs through the reuse of Electron’s first stage. The payload for the potential reflight will be announced following the completion of final testing.

Rocket Lab Enters The Carbon Composite Manufacturing Business

Rocket Lab has incubated and acquired some of the best carbon composite manufacturing talent in the world, acquired some of the most expensive and capable tooling in the world for pennies on the dollar, and is now maximizing that investment by entering the carbon composite manufacturing business.

Screenshot of Rocket Lab Tweet

This is a no-brainer and typical of Rocket Lab’s persistent resource efficiency. The personnel and equipment in this side of the business are extremely rare and valuable and the last thing you want is either of them sitting idle. This also continues to offset the risk posed by the lumpy launch side of the business which is always a good thing.

Rocket Lab's Acquisition Strategy: Insights from Previous Acquisitions

While I have a solid understanding of Rocket Lab’s approach to M&A, I thought it would be interesting to feed AI several of the company’s acquisition announcements and ask it to find common themes that might inform their approach to future acquisitions. Here’s the result:

New Space Blog
Examine the press releases from Rocket Lab regarding their acquisition of smaller companies. Specifically, focus on the instances where Rocket Lab has either fully acquired these companies or purchased substantial parts of their operations. Craft a blog post that identifies and outlines the recurring themes from these press releases in bullet points. Further, analyze these themes to predict the nature of Rocket Lab’s potential future acquisitions, providing insights into why these particular types of companies might be targeted next.

Claude 3 Opus
Rocket Lab, a leading launch and space systems company, has been on an acquisition spree in recent years. By examining their press releases regarding the acquisition of smaller companies, several recurring themes emerge:

  • Vertical Integration: Rocket Lab has consistently targeted companies that complement their existing capabilities, allowing them to streamline their production process and offer comprehensive space solutions. The acquisitions of SolAero (solar power products and precision aerospace structures), Advanced Solutions, Inc. (mission software, simulation, and GNC solutions), and Planetary Systems Corporation (spacecraft separation systems) all contribute to Rocket Lab’s goal of vertical integration.

  • Strengthening Space Systems Portfolio: Rocket Lab has focused on acquiring companies that enhance their Space Systems division. The acquisitions of Sinclair Interplanetary, Advanced Solutions, Inc., and Planetary Systems Corporation have all brought valuable expertise and products to Rocket Lab’s spacecraft hardware solutions.

  • Leveraging Manufacturing Capabilities: Rocket Lab has strategically acquired companies with advanced manufacturing facilities and skilled teams. The acquisition of SailGP Technologies' manufacturing complex in Warkworth, New Zealand, and the purchase of Virgin Orbit’s Long Beach facility both demonstrate Rocket Lab’s commitment to expanding their production capabilities.

  • Retaining Talent: In their acquisitions, Rocket Lab has prioritized retaining the talented teams from the acquired companies. This is evident in the SailGP Technologies acquisition, where over 90% of the New Zealand-based staff were retained, and in the integration of teams from Advanced Solutions, Inc. and Planetary Systems Corporation.

Based on these recurring themes, we can predict the nature of Rocket Lab’s potential future acquisitions:

  1. Companies with unique space technologies: Rocket Lab will likely continue to target companies that offer innovative technologies or products that can be integrated into their Space Systems division. This could include companies specializing in advanced sensors, propulsion systems, or communication technologies for satellites.

  2. Firms with specialized manufacturing capabilities: As Rocket Lab continues to scale up production of their Electron rocket and develop the larger Neutron rocket, they may seek out companies with specialized manufacturing capabilities in advanced materials, such as composites or 3D printing, to further streamline their production processes.

  3. Startups with talented teams: Rocket Lab recognizes the value of skilled personnel and may target startups with experienced teams in aerospace engineering, software development, or other critical areas. Acquiring these companies allows Rocket Lab to quickly add expertise and accelerate their growth.

  4. Companies with strategic locations: Rocket Lab may consider acquiring companies based in locations that offer strategic advantages, such as proximity to key customers, access to specialized supply chains, or favorable regulatory environments for space activities.

By continuing to acquire companies that align with their vertical integration strategy, strengthen their Space Systems portfolio, expand their manufacturing capabilities, and bring in talented teams, Rocket Lab is positioning itself to be a major player in the rapidly growing space industry. As they continue to scale up and take on more ambitious projects, such as the development of the Neutron rocket, strategic acquisitions will likely remain a key part of their growth strategy.

New Space Blog
Rocket Lab is making significant investments in the development of their Neutron Rocket but recently secured over $300 million in an offering that they have signaled might be leveraged for multiple acquisitions. Given the extra cash on hand, but also the desire to perform multiple acquisitions, what does this say about the potential size and nature of the companies that might be acquired?

Claude 3 Opus
Considering Rocket Lab’s recent cash infusion and their intention to leverage it for multiple acquisitions, we can infer several key points about the potential size and nature of the companies they might target:

  1. Smaller to mid-sized companies: Given the desire to perform multiple acquisitions, Rocket Lab is likely to target smaller to mid-sized companies rather than large, established firms. This approach allows them to spread the cash across several acquisitions, diversifying their investment and reducing risk.

  2. Strategic fit: Rocket Lab will likely prioritize companies that align with their strategic goals, particularly those that support the development of the Neutron rocket. This could include companies specializing in advanced materials, propulsion technologies, or other critical components for the Neutron project.

  3. Complementary capabilities: As seen in their previous acquisitions, Rocket Lab will likely target companies that offer complementary capabilities to their existing operations. This could include firms with expertise in areas such as software development, guidance systems, or satellite technologies that can be integrated into Rocket Lab’s Space Systems division.

  4. Affordable valuations: With a limited budget for multiple acquisitions, Rocket Lab may focus on companies with affordable valuations relative to their strategic value. This could include early-stage startups or companies with strong potential but limited market traction.

  5. Talent acquisition: Rocket Lab may also use these acquisitions as an opportunity to bring in talented teams with specialized skills and experience. Smaller companies often have highly skilled personnel who can contribute significantly to Rocket Lab’s research and development efforts.

  6. Geographic expansion: Rocket Lab might consider acquiring companies based in strategic locations to expand their geographic footprint, access new markets, or tap into local talent pools.

In summary, Rocket Lab’s cash infusion and desire to perform multiple acquisitions suggest that they will likely target smaller to mid-sized companies that offer strategic fit, complementary capabilities, affordable valuations, and skilled talent. These acquisitions will probably focus on supporting the development of the Neutron rocket and expanding Rocket Lab’s Space Systems division, while also potentially enabling geographic expansion. By carefully selecting their acquisition targets, Rocket Lab can maximize the impact of their investment and strengthen their position in the rapidly evolving space industry.

Peter Beck On Building Beautiful Things

Rocket Lab Electron Rocket

Peter Beck, CEO and CTO of Rocket Lab, discussed the company’s innovative culture, future plans, and his advice for aspiring space entrepreneurs in an interview with Gizmodo. Some key points:

  • Rocket Lab fosters innovation by rapidly prototyping and testing ideas, taking bold swings at transformative technologies like 3D-printed rocket engines, and focusing on building aesthetically beautiful products.
  • Beck has established Rocket Lab as an end-to-end space company, combining launch capabilities with satellite manufacturing and operation, catering to customers who want turnkey space solutions.
  • Critical emerging space technologies include internet from space, direct mobile connectivity, and pharmaceutical manufacturing in space. Rocket Lab is involved in all these and other areas through its diverse offerings.
  • The biggest potential space innovation lies in propulsion technology, moving away from conventional chemical rockets to enable more substantial progress.
  • 3D printing is crucial for Rocket Lab, enabling rapid design iterations and manufacturing geometries impossible with traditional techniques.
  • Beck’s advice to entrepreneurs: Focus on developing technologies that address real market needs and have scalability, rather than niche solutions or “cool” tech without demand.

It’s very technical and process focused but this round-table discussion featuring Myles Keefer, Rocket Lab’s Manager of Additive Manufacturing reinforces a lot of the points made by Beck. The engineering philosophy of the company is unique and, in my opinion, underappreciated. It’s more Apple than SpaceX but it’s also informed by an unrelenting focus on efficiency and practicality.

Varda Lands $90M In Series B Funding

This is a very encouraging development, not just for Varda (and Rocket Lab) but also for the potential growth of space manufacturing overall:

Astronauts have been conducting protein crystallization experiments in space for decades on the International Space Station and before that, the Space Shuttle.

But the business case for expanding this research has never materialized — until now. This is for a few different reasons, Asparouhov explained: because of the crew, there are significant limitations to the types of solvents or other materials you can bring onboard the ISS; there are constraints related to intellectual property for work that happens on the station; and pharmaceutical lab equipment designed for use in-space was generally lacking in sophistication compared to the terrestrial versions.

But much has changed, especially in the space industry. Part of the reason Varda is possible today is due to the availability of regular, low-cost rideshare launches from SpaceX and Rocket Lab’s innovations in satellite bus manufacturing. Even beyond these external partnerships, the startup has made significant headway in its own right, as the success of the first mission showed: Their reentry capsule appears to have performed flawlessly and the experiment to reformulate the HIV medicine ritonavir was executed without a hitch, it says.

Varda and Rocket Lab will launch capsule #2 later this year. Keep an eye on this relationship. It will be interesting to see how it develops now that Varda is on firmer footing.

Earth Observation Matures

Payload has a really interesting piece on the state of earth observation (EO) and how the industry is shifting its focus towards profitability, government funding, and addressing niche issues, as commercial demand lags expectations.

Key points:

  • Current EO market breakdown: ~50% US government, 25% allied governments, 25% commercial
  • Major players like Planet, Spire, BlackSky, and Maxar are prioritizing profitability after years of growth
  • Early movers have an advantage with significant initial investments creating barriers to entry
  • Startups need to differentiate through niche capabilities like hyperspectral imaging, climate monitoring, or edge computing
  • AI and data analytics are seen as potential growth drivers for the industry
  • SpaceX’s $1.8B NRO contract highlights the government’s dissatisfaction with the state of EO and their desire for cost-effective EO solutions

Of course the macro-economic environment that many of these companies have come to market in hasn’t helped. As far as I’m concerned the focus on profitability and selectivity in new venture funding is a welcome side effect of these new economic realities. The survivors from the current crop will grow stronger and the industry should finally be able to avoid the boom bust cycle that has plagued previous attempts to cement new space as a persistent and critical part of the economy. The commercial markets will grow - just never as quickly as the pitch decks predict.

Rocket Lab Schedules 2024 Q1 Earnings Call

The webcast is scheduled for May 6, 2024 05:00 PM ET.

Intuitive Machines, Lunar Outpost, And Venturi Astrolab Move Forward On LTV

Intuitive Machines Moon Racer Lunar Terrain Vehicle (LTV) Concept Art

The real race for the multi-billion dollar contract is on:

Each provider will begin with a feasibility task order, which will be a year-long special study to develop a system that meets NASA’s requirements through the preliminary design maturity project phase. The agency will issue a subsequent request for task order proposal to eligible provider(s) for a demonstration mission to continue developing the LTV, deliver it to the surface of the Moon, and validate its performance and safety ahead of Artemis V. NASA anticipates making an award to only one provider for the demonstration. NASA will issue additional task orders to provide unpressurized rover capabilities for the agency’s moonwalking and scientific exploration needs through 2039.

The LTV will be able to handle the extreme conditions at the Moon’s South Pole and will feature advanced technologies for power management, autonomous driving, and state of the art communications and navigation systems. Crews will use the LTV to explore, transport scientific equipment, and collect samples of the lunar surface, much farther than they could on foot, enabling increased science returns.

…Between Artemis missions, when crews are not on the Moon, the LTV will operate remotely to support NASA’s scientific objectives as needed. Outside those times, the provider will have the ability to use their LTV for commercial lunar surface activities unrelated to NASA missions.

While people look at this as a simple “moon buggy” project, something that was done decades ago, this is actually going to be an extremely sophisticated and long-lasting piece of lunar infrastructure that will require advances in technology and extremely well-thought out engineering, not to mention a novel servicing and repair plan, if is to have any shot at lasting a decade or more in lunar conditions.

Lockheed Invests in Fusion Engine Startup

An interesting play by Lockheed - and a new company to keep an eye on:

Helicity Space, a California startup developing fusion engines for spaceflight, announced an investment April 2 from Lockheed Martin Ventures.

While the parties declined to reveal the value of the investment, Lockheed Martin’s backing is important because it’s one of the “strategic partners that will matter over the next 10 years,” Helicity co-founder Stephane Lintner told SpaceNews.

Other strategic partners include Airbus Ventures and Voyager Space Holdings, two of the investors in Helicity’s seed funding round announced in December.

I’ve added Helicity to my growing (but far from complete) directory of New Space companies.

Voyager Space and Palantir Team Up

Voyager Space and Palantir have teamed up for another AI+Space partnership:

Working with a company like Palantir, well known for its artificial intelligence and machine learning technology, would facilitate processing in space, allowing for a more concise transmission of data to Earth.

“At Voyager, we have a lot of heritage in space station work, exploration work, the design and development,” Kuta said. “But one area that it definitely made sense to partner with a company like Palantir was on the software side.”

Kuta said the work with Palantir will be focused primarily on national security that could include other allied nations and partner organizations such as NATO.

“Voyager and Palantir have already done joint proposals to potential customers,” Kuta said.

As posted earlier, I expect this trend to only increase as companies move to lock in some of these existing data pipelines and position themselves to build new ones.

The Case for Lunar Data Centers

In the ongoing quest to push the boundaries of technology and innovation, a bold new frontier is emerging: lunar data centers. While the concept may seem like science fiction, there are compelling reasons to consider establishing data centers on the moon. Recently, Lonestar Data Holdings Inc. successfully demonstrated the viability of lunar data storage through their Independence Mission, marking a significant milestone in this field. In this post, we’ll explore the various benefits that lunar data centers could offer.

Abundant Solar Energy The moon’s surface is exposed to a nearly constant supply of solar radiation, unimpeded by clouds or atmospheric interference. This presents a tremendous opportunity for harnessing solar power to run data centers. With advanced solar panel technology, lunar data centers could potentially operate on a near-continuous basis, providing reliable and sustainable energy.

Improved Cooling Efficiency Cooling is a critical challenge for terrestrial data centers, requiring significant energy expenditure. However, the moon’s environment offers a unique advantage. The lunar surface experiences extreme temperature swings, with temperatures plummeting to -150°C during the lunar night. By leveraging this natural cooling, lunar data centers could achieve unprecedented levels of cooling efficiency, reducing energy consumption and operational costs.

Enhanced Data Security Data security is a paramount concern in our increasingly digitized world. Lunar data centers could provide an additional layer of protection against physical threats and unauthorized access. The moon’s remote location and harsh environment create natural barriers, making it exceptionally difficult for malicious actors to physically breach the facilities. Additionally, the vacuum of space surrounding the moon could enable the implementation of advanced quantum encryption techniques, further bolstering data security.

Reduced Latency for Space Exploration As humanity continues to explore and colonize space, the need for efficient data processing and communication becomes increasingly critical. Lunar data centers could serve as a vital hub for space-based operations, reducing latency and enabling real-time data analysis. By positioning computing resources closer to space missions, lunar data centers could enhance the capabilities of space exploration, facilitating scientific research, and supporting future human settlements beyond Earth.

Backup and Disaster Recovery In the event of a catastrophic event on Earth, lunar data centers could serve as a secure off-world backup solution. By replicating critical data and systems on the moon, organizations could ensure the continuity of their operations even in the face of global disasters. The moon’s isolation and stability provide an ideal environment for long-term data preservation and recovery.

Advancing Technological Innovation The challenges associated with establishing lunar data centers would drive significant advancements in various fields, including energy storage, cooling technologies, robotics, and telecommunications. The innovations developed to overcome the unique constraints of the lunar environment could have far-reaching implications, benefiting not only the IT industry but also other sectors such as manufacturing, healthcare, and transportation.

As demonstrated by Lonestar’s successful test, the concept of lunar data centers is no longer confined to the realm of science fiction. As we continue to push the boundaries of what is possible, the moon offers a promising platform for advancing computing capabilities and ensuring the resilience of our digital infrastructure. By embracing the potential of lunar data centers, we can unlock new frontiers in data processing, security, and space exploration, propelling us into a new era of technological achievement.

Note: To generate this post I fed Claude 3 updated information about Lonestar’s Independence payload test and asked it to detail the benefits lunar data storage might offer.

Lockheed Gets More Aggressive

As New Space heats up Lockheed Martin is looking to make moves:

“We’re looking for strategic partners,” said Robert Lightfoot, president of Lockheed Martin Space. “We’re interested in talking with anyone who has an advantage in those areas from a space perspective.”

The $67 billion aerospace and defense giant wants to work with commercial companies with expertise in intelligence and surveillance payloads, as well as communications payloads for satellites, as it looks to meet growing government demand for resilient space-based capabilities.

Profile: Intuitive Machines

Photo of the Intuitive Machines Nova-C lander

Intuitive Machines, a Houston-based private space company, has made history with the successful landing of its Nova-C lunar lander, named Odysseus, on the Moon’s surface. Despite facing challenges during the touchdown, which resulted in a broken leg, the spacecraft continued to function and send valuable data back to Earth, marking a significant milestone in the new era of lunar exploration.

Launched on February 15, 2024, by a SpaceX Falcon 9 rocket, Odysseus reached lunar orbit on February 21 and successfully completed a soft landing on the lunar surface on February 22. This achievement makes Odysseus the first privately built vehicle to land on the Moon and the first American spacecraft to perform a soft landing on the lunar surface in over 50 years.

NASA and commercial customers had contracted Intuitive Machines to carry 12 payloads aboard the Nova-C lander as part of the agency’s Commercial Lunar Payload Services (CLPS) program. Despite the lander’s awkward orientation after touchdown, NASA Administrator Bill Nelson praised the mission’s success, stating, “Odysseus is a success. We are in the sixth day of what was planned as an eight-day mission, and we’re still receiving data from those instruments.”

Intuitive Machines' Nova-C lander is a state-of-the-art spacecraft designed to provide reliable and cost-effective payload delivery services to the Moon. Notably, Odysseus is the first spacecraft to utilize methalox propulsion for navigating between Earth and the Moon, showcasing the company’s innovative approach to lunar exploration.

The success of the IM-1 mission is just the beginning for Intuitive Machines and its Nova-C landers. The company has two more missions planned, with the IM-2 mission scheduled to launch no earlier than the fourth quarter of 2024 and the IM-3 mission set for early 2025. SpaceX has been contracted to provide Falcon 9 launches for each of these three landers, further cementing the collaboration between private space companies in advancing lunar exploration.

As the competition for lunar resources and strategic positioning intensifies among global powers, the role of private companies like Intuitive Machines becomes increasingly crucial. This is particularly evident in the context of China’s aggressive lunar exploration program, which has made significant strides in recent years. China’s successful Chang’e missions, including the historic first-ever landing on the far side of the Moon by Chang’e-4 in 2019, have demonstrated the country’s growing capabilities and ambitions in space.

Furthermore, China has announced plans for a crewed lunar landing mission and the establishment of a permanent lunar base in the 2030s, in collaboration with Russia. This strategic partnership between two major space powers poses a significant challenge to the United States' dominance in space exploration and underscores the importance of private companies like Intuitive Machines in maintaining America’s competitive edge.

By demonstrating the capability to deliver payloads to the lunar surface, even in the face of challenges, Intuitive Machines has positioned itself as a key player in the new space race. The company’s success not only bolsters NASA’s efforts to return humans to the Moon but also sends a strong message to competitors like China that the United States is committed to maintaining its leadership in space exploration.

The success of the Nova-C lander not only represents a significant achievement for Intuitive Machines but also highlights the growing importance of public-private partnerships in advancing space exploration. As NASA and other space agencies continue to collaborate with private companies, the pace of lunar exploration and the potential for establishing a sustainable human presence on the Moon are set to accelerate. This collaborative approach will be essential in countering China’s ambitious plans and ensuring that the United States remains at the forefront of lunar exploration and resource utilization.

Moreover, the involvement of private companies like Intuitive Machines in the space race has the potential to drive innovation, reduce costs, and increase the efficiency of lunar missions. As these companies continue to develop and refine their technologies, they will play an increasingly critical role in shaping the future of space exploration and the balance of power in the new space age.

Note: To generate this post I fed Claude 3 updated information about Intuitive Machine’s recent lunar mission and asked it to analyze the company in context of what many are calling Space Race 2.0.

Spire Global and NVIDIA Partner on Weather Data

I wrote a post a few days ago about the importance of AI and New Space for each other and said that the realization may sink in with the public and wall street types more broadly once someone like OpenAI makes a big move in the space. Well, it turns out that someone is NVIDIA:

The field of weather prediction is changing rapidly due to advances in AI. Spire’s multipurpose constellation of satellites, utilizing RO technology, offers unmatched global coverage of precise vertical profiles of temperature, pressure, and humidity across the globe, including under-observed areas and remote regions. By combining this dataset and Spire’s proprietary DA analyses with NVIDIA’s advanced AI platforms and APIs, this collaboration aims to usher in a new era of accuracy in weather forecasting.

“As our world grapples with dynamic shifts in climate, anticipating and mitigating the impact of extreme-weather events poses escalating challenges for companies, individuals, and communities,” said Michael Eilts, general manager of weather and climate at Spire. “Aligning Spire’s proprietary data and unmatched global weather coverage with NVIDIA’s cutting-edge technology and expertise positions us to markedly elevate the accuracy of weather prediction. This collaboration will help ensure our customers are not just informed but empowered to proactively address the evolving climate landscape.”

Spire Global, like many New Space companies, possesses a crucial asset sought after by AI solution providers—massive amounts of high-quality, useful, and hard-to-source data. While this RO data has numerous applications, Spire Global has invested heavily in leveraging it for weather and climate analytics as well as forecasting. The company is already making significant strides in this domain, but partnerships with AI leaders like NVIDIA could unlock markets and benefits far beyond those initially envisioned by New Space data generators. Expect to see more groundbreaking announcements along these lines in the near future.

Claude AI: 30 Business Concepts that Leverage LEO Data and AI

I asked GPT-4 to generate a list of 30 business concepts that leverage LEO observation data and AI:

  • High-Resolution Advertising Analytics: Monitors and analyzes foot traffic in commercial areas using high-resolution satellite imagery, offering insights to advertisers for targeted billboard placements.
  • Offshore Energy Monitoring: Provides surveillance and maintenance planning for offshore energy installations like wind farms and oil rigs, enhancing efficiency and safety.
  • Smart Logistics and Supply Chain Management: Uses satellite data to optimize shipping routes by monitoring weather conditions and maritime traffic, reducing fuel consumption and improving delivery times.
  • Deforestation Alert System: Offers real-time alerts on illegal deforestation activities, catering to governments, NGOs, and carbon offset companies for immediate action.
  • Land Dispute Resolution Services: Utilizes historical satellite imagery to resolve land disputes by providing undisputable evidence of land use and boundaries over time.
  • Luxury Crop Monitoring: Specializes in monitoring the health and status of luxury crops like vineyards and truffle farms, providing precision agriculture services to high-value agriculture sectors.
  • Mining Exploration and Management: Supports mining operations by identifying potential sites, monitoring environmental compliance, and managing resources more efficiently with satellite imagery.
  • Construction Progress Tracking: Offers construction firms and investors the ability to remotely monitor project progress and compliance with plans, reducing the need for onsite visits.
  • Polar Route Navigation Services: Provides up-to-date ice and weather data for ships navigating through polar routes, optimizing travel time and ensuring safety in increasingly accessible Arctic and Antarctic passages.
  • Virtual Real Estate Tours: Creates detailed, satellite-based virtual tours of real estate properties, especially in remote or undeveloped areas, enhancing marketing efforts for real estate agencies.
  • Infrastructure Health Monitoring: Uses high-resolution imagery to assess the condition of critical infrastructure like bridges, roads, and dams for maintenance planning.
  • Agricultural Insurance Verification: Verifies insurance claims by monitoring crop health and damage after natural events, ensuring accurate claim processing.
  • Space Debris Tracking and Management: Identifies and tracks space debris to mitigate collision risks with operational satellites and spacecraft, supporting safer space operations.
  • Precision Agriculture: Offers detailed crop health monitoring and soil moisture levels, enabling farmers to optimize irrigation, reduce waste, and improve crop yields.
  • Climate Change Monitoring: Utilizes satellite imagery to track changes in ice caps, deforestation rates, and desertification, providing data for climate research and environmental policy-making.
  • Urban Expansion Analysis: Tracks urban sprawl and infrastructure development, aiding city planning and sustainable growth initiatives.
  • Disaster Response and Management: Provides real-time data on natural disasters like floods, wildfires, and hurricanes, improving emergency response and recovery efforts.
  • Ocean and Marine Life Monitoring: Studies changes in marine ecosystems, tracks illegal fishing activities, and monitors ocean pollution levels.
  • Air Quality and Pollution Tracking: Uses observation data to map pollution sources and air quality, supporting environmental health initiatives.
  • Forest Management and Protection: Detects illegal logging activities, monitors forest health, and supports reforestation efforts by analyzing vegetation cover over time.
  • Wildlife Migration Tracking: Observes and analyzes wildlife migration patterns and habitat changes, aiding in species conservation efforts.
  • Glacier Monitoring Services: Tracks glacier retreat and melting rates, offering vital data for water resource management and climate science.
  • Real Estate and Land Use Analysis: Provides insights into land use changes, real estate development patterns, and valuation trends for investors and developers.
  • Energy Infrastructure Monitoring: Monitors the construction and operation of renewable energy farms (solar, wind) and traditional energy facilities for efficiency and environmental impact assessments.
  • Archaeological Site Discovery: Helps in identifying potential archaeological sites and changes in historical landscapes through remote sensing technologies.
  • Insurance Risk Assessment: Uses data on environmental and urban changes to better assess risks related to natural disasters and climate change, impacting insurance premiums and policies.
  • Iceberg Tracking for Shipping: Offers real-time data on iceberg locations and movements, enhancing navigational safety for maritime shipping routes.
  • Water Resource Management: Monitors reservoir levels, river flows, and overall water resources to support sustainable management and allocation.
  • Snow Cover and Avalanche Prediction: Analyzes snowpack levels and stability to predict avalanche risks, supporting ski resort management and public safety initiatives.
  • Coastal Erosion Monitoring: Tracks changes in coastal lines and erosion rates, aiding in coastal management and protection strategies.

Rocket Lab and Viasat Team Up on Tech Demo

Payload has a good, concise write-up on Rocket Lab’s recent announcement that they’ll partner with Viasat to demo a proposed replacement for NASA’s Tracking and Data Relay Satellite (TDRS) system. The deal, pretty cool and potentially lucrative long-term in its own right, is also (in typical Rocket Lab fashion) a strong strategic move:

Beck said last month that Rocket Lab’s partnerships were strategic, with the goal of matching SpaceX as a company that can both build and launch spacecraft. This project aims to give the company experience with responsive space communications, and the opportunity to develop a new L-band radio, moving toward Beck’s goal of operating his own satellite network in the next decade.

Blacksky and the Importance of AI in New Space

BlackSky is doing some interesting work in the AI space:

BlackSky, a supplier of satellite imagery and space-based intelligence, won a $2 million U.S. defense contract to provide data to train AI models.

The contract was awarded by the defense contractor Axient on behalf of the Air Force Research Laboratory. Axient in September 2023 won a contract from AFRL worth up to $25 million for space experiments.

Axient will use BlackSky’s satellite imagery and data analytics platform to support studies and technology demonstrations focused on tracking moving objects from space.

As someone who works on AI solutions professionally, I’m a little surprised that there isn’t more discussion about the immense value and potential of space data and AI. The value is pretty well understood with constellation builders and in the intelligence sector but less so with the general public, the broader commercial sector, and on Wall Street. Companies like Blacksky, Spire Global, and other LEO operators are generating vast libraries of data that, when made available to AI for training or analysis, will drive countless impactful applications. There is currently a lot of focus on real-time or fresh data but for many applications the value of these libraries grows significantly as they age and scale.

Low-cost sensor platforms and launch have fueled the rise of New Space but the convergence of AI and these capabilities is the key to unlocking hugely profitable markets that will cement space as a significant and permanent pillar of the economy - one that is visible and top of mind for the general consumer. I expect this realization to sink in within the next couple of years, or sooner, if someone like OpenAI makes a high profile move in this space (which I am also expecting) much like they did recently with robotics.

The Space Race Just Keeps Heating Up

Space assets are the most important enabler, and most significant vulnerability, in a superpower conflict. The U.S. government knows it and It’s why we have the Space Force and organizations like SDA. But while we are starting to scale and support a surging New Space industry China can, in some respects, surge faster:

China is growing its military capabilities in space at a “breathtaking pace” to counter the American satellites in orbit and improve its ability to monitor and target forces on Earth, according to the head of the US Space Command.

America’s top strategic challenger is seeking to develop advanced space weaponry and making advances in satellite meteorology, human spaceflight and robotic space exploration, General Stephen Whiting said during a hearing Thursday of the Senate Armed Services Committee.

We still hold the advantage but we could lose it surprisingly quickly if we don’t properly prioritize space. The coming decades will require the same level of focus and investment in the domain that we have poured into naval and air power. The time to build the infrastructure for rapid industrialized production and delivery of space assets is now. Thankfully we’re doing that with responsive space initiatives at companies like Rocket Lab, Terran Orbital, and Firefly. It’s a start, but we will need to do more.

Rocket Lab and Varda Pull Off Historic Recovery

The Rocket Lab team setting up the Varda Space in orbit drug manufacturing spacecraft for re-entry.

Rocket Lab Mission Control Working to bring Varda Space capsule back to Earth

And the capsule’s successful recovery.

Varda Space capsule recover in the Utah desert

It took months for the team to land FAA part 450 approval for its landing in Utah but the spacecraft was well positioned to deal with the delays:

Today’s mission is a successful demonstration of Rocket Lab’s end-to-end space systems solutions tailored to enable novel and innovative missions for a range of customers. Rocket Lab designed, manufactured and operated a bespoke spacecraft to enable Varda’s capsule manufacturing demonstration. The spacecraft included a full suite of Rocket Lab sub-systems and components built in-house, spanning spacecraft engine, flight software, avionics, reaction wheels, star trackers, capsule dispenser, solar panels, radio, composite structures and tanks, and more.

While initially designed for a four-month lifespan on orbit, the mission timeline was more than doubled with Rocket Lab’s spacecraft successfully provided power, communications, ground control, and attitude control to Varda’s capsule on orbit for more than eight months. This enabled Varda’s capsule to grow Ritonavir crystals, commonly used in antiviral medication. As particles function differently when no longer under the force of gravity, Varda’s capsule utilizes microgravity conditions in space to formulate a range of pharmaceutical products.

Subsequent missions should be a lot easier to manage and the FAA seems to be getting on board to streamline the process for what looks like the birth of in-orbit manufacturing at scale.