Jeff Bezos Backs Elon Musk's 'Very Realistic' Plan For Space-Based Data Centers Ahead Of SpaceX IPO

• Bezos added that he doesn’t think anyone knows how long it will take to set up data centers in space, while laying down the ground rules for what would need to happen if this ambitious idea were to be realized.
• He predicted that energy costs will eventually increase for terrestrial data centers and semiconductor chips, which are expensive today, will become cheaper.
• Bezos also downplayed fears of an AI bubble and widespread job losses, saying the technology will enhance existing roles rather than replace workers.

Amazon.com Inc. (AMZN) and Blue Origin founder Jeff Bezos on Wednesday backed rival Elon Musk’s proposal of data centers in space, ahead of the $1.75 trillion initial public offering (IPO) of SpaceX.

During an interview with CNBC, Bezos said that data centers in space are a “very realistic” idea, but differed with Musk on the timeline to set them up.

“What Elon would tell you is, if we don't set an ambitious timetable... if you want it in six years, say three…” he said, while adding that the two to three years timeline to achieve this feat is very short and ambitious.

Don’t Think Anyone Knows How Long It Will Take, Says Bezos

Bezos added that he doesn’t think anyone knows how long it will take to set up data centers in space, while laying down the ground rules for what would need to happen if this ambitious idea were to be realized.

“Energy needs to become a bigger percentage of the cost of terrestrial data centers. Today, terrestrial data centers spend less than 15% of their total cost of ownership on energy. The biggest advantage to being in space is that the energy is free,” he said.

Bezos predicted that energy costs will eventually increase for terrestrial data centers and semiconductor chips, which are expensive today, will become cheaper.

“The second thing is, the launch cost has to come down, and very significantly, by a factor of 10. That’s what we’re working on right here, that’s what Blue Origin is doing,” he added.

Bezos owns Blue Origin, and the aerospace startup is a rival of Musk-led SpaceX.

Space-Based Data Centers Don’t Change Investing Thesis For Those On Ground

Bezos added that his belief that data centers in space are realistic does not change the investment thesis for terrestrial data centers.

“I don’t think so, because the timeline again is very different. You’re going to need as much terrestrial data center capacity as you can arrange in the near-term,” he said.

Blue Origin filed plans with the Federal Communications Commission (FCC) in March this year to deploy 51,600 low-Earth orbit data center satellites under its “Project Sunrise” initiative.

Bezos Downplays AI Bubble Concerns

Bezos also downplayed concerns of an AI bubble, urging investors not to worry about it.

“Even if it does turn out to be a bubble, you shouldn’t worry about it because the bubble is driving investment and a lot of the investment is going to turn out to be very healthy,” he added.

Bezos also downplayed concerns of AI causing job losses, saying that the technology will help elevate existing jobs instead.

The iShares Semiconductor ETF (SOXX) is up 134% over the past 12 months, while the Global X Artificial Intelligence & Technology ETF (AIQ) is up 48%.

Also See: Analog Devices Posts Record Q2, CEO Sees Positive Demand Signals Persisting In Q3 – But Investors Want More From Chip Rally

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