00:35:55 · Saurav Shroff, Ty Morse
And between building capacity ahead of the curve and building capacity behind the curve, it is the smarter business decision to build it ahead. And for those saying, which nobody was really saying, but if you said like, you know, what about the cost of capital, etcetera, etcetera? I would say, well, what about the cost of losing? [00:36:16] S0: So if you think through basically what your biggest bottlenecks are, you get the lease here, you start filling it out with a bunch of different machines, you have the lineup in, I don't know, six, eight months, [00:36:26] S1: something 2027. [00:36:28] S0: Great. So it's about six months. What does the scaling process look like from going from one factory with a 130,000 square feet and, like, 50 megawatt production annual output to, like, a gigawatt? [00:36:43] S1: So incidentally, 1.2 gigawatts is the size of our next fab, which is called Starpath Austin Giga. Austin [00:36:50] S0: Why Giga did you choose, like, that amount versus a smaller amount? Like, what... What's the logic?
00:36:50 · Ty Morse, Saurav Shroff
[00:36:50] S0: Why Giga did you choose, like, that amount versus a smaller amount? Like, what... What's the logic? [00:36:58] S1: And we need to climb the orders of magnitude. And so you could choose a smaller amount, but it's the same answer as before, which is like in 2027, the things that customers gonna wanna see is capacity, more so than what they need. And then it... Because the next year, they're gonna need it. Right? And then in 2028, or whatever, the year after, the things that customers are gonna wanna see is capacity more so than what they need because they're gonna need it the year after. And then 2029, what are they gonna wanna see? Capacity. Capacity. Exactly right. Customers wanna see capacity because they have huge plans, and those plans, if not done, block billions, if not tens of billions in revenue for them, and that's proven. They know that. So what they wanna see is capacity. In simple English, they're not fucking around. The customers wanna see capacity. So why one gigawatt? It's just like roughly an order of magnitude higher than this facility. This facility, yes, is technically 50 megawatts, so it's 20 times as put to 10 times. Roughly, it's an order of magnitude higher. [00:38:04] S0: What do you expect to get easier as you scale from, like, a factory that roughly... What is that? 24 times the size of this one? [00:38:11] S1: No. I You don't [00:38:12] S0: don't expect anything
00:38:12 · Ty Morse, Saurav Shroff
[00:38:12] S0: don't expect anything [00:38:13] S1: get I mean, I think some things will be easier, like, you know, we will know tons of things going into Austin Giga that we knew nothing about going into this building. This is our this is our first radio. But, you know, like, I don't think that there's anything easy about building a fab. And I think if somebody does think that, I would say, where's your fab? So I don't think it's gonna be easy. It's hundreds and hundreds of millions of dollars of equipment. Almost all of it needs to work almost all of the time. It's not quite all, but, like 90% of it needs to work 90% of the time. There's nothing easy about that, and it's hard for me to foresee what the challenges are, but there... There'll be mess. And with each fab, I will move into the corner of the building. So at this building, we're just in the middle of buying an Airstream. Airstream will be installed in that corner over there, and I will sleep in the Airstream until the fab is producing product that ships to our customers, and then when we go build Austin, Giga, likely the same or maybe a different Airstream, to be honest I haven't thought about it, will be used for the same purpose, in a similar position, the corner. [00:39:28] S0: Why is it important to sleep at the factory?
00:39:28 · Ty Morse, Saurav Shroff
[00:39:28] S0: Why is it important to sleep at the factory? [00:39:31] S1: If you're sleeping in the factory, and, you know, there's not too much sound deadening and you can hear machines and forklifts, then... Okay, actually that... Specifically that might be a little annoying, but it'll be hard to take your mind off of it, which is exactly what I want. [00:39:48] S0: One of the things that you mentioned earlier today when we were basically walking around and you were just like telling me the layout and showing me the layout of everything, is you want roughly half the factory to be producing solar panels, and you want the other half of the factory producing components. Yeah. For, like, AI data center stats. [00:40:05] S1: Yeah. [00:40:06] S0: Why are you even doing that in the first place instead of just focusing, like, really focusing on this one objective?
00:40:12 · Saurav Shroff
[00:40:12] S1: Yeah. So, first of all, I should just clarify one thing quickly, which is that we are focused on bringing up production of and shipping to customers the best space solar panel ever made because they've placed orders, they've given us down payments, we've given them a schedule, and we need to uphold to the promises we make to anybody, especially our customers, especially. So we are focused. You are right that roughly half the factory will be for production of solar modules, and the other half will be for the scale production of other products, most of which... All of which actually have not been publicly released. But I'll give you give you my rationale for building them. So first of all, a data set or really a satellite bus of any kind has about... I mean, you can slice it up in various ways, but it has about 10 major components. Solar panel, I won't list all of them. So solar panel has an attitude system that points a satellite, has a thruster that propels the satellite and allows it to change its orbital altitude or inclination slightly, and a few other things. And when we entered the solar business, the satellite solar business with Starpath, we quickly learned from our customers that it was pretty fucked up market. Right? Like, there are very... There are effectively no vendors. There was no... There were lot of people doing sort of, like, half assed, not that good quality production in house for their own relatively small volumes, and there were no great products on the market as defined by the things that we talked about made products great. Made made us make the... The things we talked about make a solar panel great for space. Low cost manufacturer, lightweight, aka low cost launch. So we learned that pretty quickly. And just through simple curiosity, we also learned that the situation for most of the other things that make a satellite bus, and especially in the case of an AI dataset, were in an equally not good position. In other words, if you wanted to make an AI dataset, and you needed, you know, a 100,000 thrusters and you needed them to cost... You know, we said the dataset should be $800,000. You want the thruster to cost, you know, 50,000, 80,000. That's not a product you can buy. Okay? Nobody will sell it to you.
00:42:25 · Saurav Shroff, Ty Morse
And it's not just like that nobody will sell it to you today, which is sort of obvious, like, okay, it's a very cheap satellite. No. Okay. Obviously, nobody's gonna sell you, you know, parts to make a dirt cheap satellite today, but it's also the case that if you went to the vendors who were selling those components, who are selling those components, and you asked them, hey, I wanna buy a 100,000, and I I wanna put money down today. What unit economics what unit economics can you achieve? They're, like, not even up to up to the challenge. Like, could argue, like, the dev cost for a satellite is in the hundreds of millions of dollars for the first time you make it, and this is, like, a well supported fact by the fact that, like, you know, the Starlink v one costs about around that much, and so all these satellite startups that spend, you know, hundreds... Few hundreds of millions of dollars building satellite, and if you approach a satellite components vendor and say, hey, wanna buy a 100,000 thrusters, I'll give you a 100,000,000 up front, which is certainly enough money to develop a great thruster. They're not even up for the challenge. And by by by up for the challenge, mean, are willing to sell components, in this case thrusters, but in in any... This applies to all the all the components at a price that actually works for a data set. [00:43:45] S0: The, like, idiot index is just retarded.