Mike Schroepfer, Meta's ex-CTO, believes that as the marginal cost of software ("bits") trends to zero, the next major wave of innovation will be in the physical world ("atoms"). His new fund, Gigascale Capital, invests in areas like energy, data centers, and manufacturing, which he sees as the new frontier.

While space data centers garner hype for solving land and power constraints, underwater locations provide comparable advantages like free "land," reduced regulations, and natural cooling. This makes them a potentially more practical and overlooked alternative for scaling compute infrastructure.

OpenAI CEO Sam Altman's move to partner with a rocket company is a strategic play to solve the growing energy, water, and political problems of massive, earth-based data centers. Moving AI compute to space could bypass these terrestrial limitations, despite public skepticism.

The primary advantage of orbital data centers isn't cost, but speed to market. Building on Earth involves years of real estate, permitting, and power grid challenges. The space-based model can turn manufactured chips into operational compute within weeks by treating deployment as an industrial manufacturing and launch problem.

On Earth, each new data center is more expensive than the last due to land and energy constraints. In space, manufacturing satellites at scale and declining launch costs (via Starship) mean the marginal cost for each new data center goes down, creating fundamentally different scaling economics.

While companies like SpaceX and Google explore costly orbital data centers, more feasible alternatives exist. Floating blimp data centers over oceans or submersible units leveraging seafloor resources could bypass land-based NIMBYism and regulatory hurdles more efficiently and cheaply than space-based solutions.

The exponential growth of AI is fundamentally constrained by Earth's land, water, and power. By moving data centers to space, companies can access near-limitless solar energy and physical area, making off-planet compute a necessary step to overcome terrestrial bottlenecks and continue scaling.

While most renewables suffer from intermittency, Panthalassa is building floating compute nodes in the Southern Hemisphere ocean. This region offers uniquely consistent and powerful wind and waves, creating a reliable, baseload-like energy source that is ideal for the constant power demands of AI, bypassing land-based grid constraints.

Leaders from Google, Nvidia, and SpaceX are proposing a shift of computational infrastructure to space. Google's Project Suncatcher aims to harness immense solar power for ML, while Elon Musk suggests lunar craters are ideal for quantum computing. Space is becoming the next frontier for core tech infrastructure, not just exploration.