> It offers no real advantages over doing the same thing on Earth

Abundant solar energy, free real estate, less regulation, less backlash from NIMBYs, simpler (yes) cooling.

> Energy is far cheaper and more abundant here than in space.

Huh? The sun is obviously the most abundant source of energy in the solar system.

Satellites in a dusk dawn sun synchronous orbit can be fully illuminated 24/7, so they receive ~6x more solar energy than panels on earth. They also don’t need batteries to operate 24/7, and the panels don’t need glass to deflect hail.

> Heat dissipation

Yes, it will require large radiators. They’re mechanically simpler than terrestrial cooling though.

> Radiation shielding

It turns out generative AI is somewhat uniquely robust to occasional bit flips.

- Either the most complex in-space construction ever undertaken, or the most complex distributed computing problem ever undertaken (no, Starlink satellites aren't good enough, we're orders of magnitude away from replicating the speed and reliability of connections within a single room)

It won’t be a single structure, and will only be used for inference, so latency between satellites/racks doesn’t matter.

- Zero flexibility, zero repairability, zero upgradability. Either it's working, or you make it burn up in the atmosphere with no in-between. Add on that the rationality of sending mountains of precision-manufactured tech containing many uncommon metals only for them to be completely lost. This makes the pricing even worse, in addition to - Already high costs for designing, building and launching all that in addition to all the extra weight overhead you're taking in components that don't do computation, when the alternative is building a glorified warehouse in the middle of nowhere.

I think people vastly underestimate how much a fully reusable Starship will change the economics of space operations.

Not only the initial launch costs, but things like refueling and repairing satellites becomes more economical. I wouldn’t be surprise if SpaceX sends Starships to refuel/maintain satellites to keep them in orbit longer. In fact, SpaceX’s own animation shows modular servers sliding in and out of the satellites.