The economics is constrained by physics. AI in space is not viable if it costs $1000/kg to launch to space. Starship promises to cut that down to $100/kg (more if you believe Elon, but most don't), but that's still not competitive.

Sure, things would be different if the cost was $1/kg, but short of somebody building a space elevator that's just not going to happen.

I won't believe less than $100/kg until I see it. I agree with you on that.

But are you sure that $100/kg is not competitive? I don't remember all the math, but even their initial AI1 design[1] would throw a lot of profit, if you can sell at the price they offered to Anthropic.

I suspect the price of manufacturing the satellite, plus chips, is the dominating factor, not necessarily the launch costs.

[1] https://www.spacex.com/spacexai/starmind