Sophia Space and SLI, an aerospace leasing venture based in Washington, D.C., say they’ve agreed on a $300 million asset-financing framework that will support the creation of a 10-satellite constellation for high-performance computing.

The details of the arrangement are as notable as the bottom line: Sophia Space will build the satellites, leveraging the startup’s patented TILE technology for modular in-space data processing. SLI will purchase the satellites under the terms of a financing agreement.

“SLI as the lessor will purchase the satellites from Sophia, hold title to the assets, and lease them to the end user on a long-term basis in exchange for fixed monthly or quarterly payments,” Max Yergan, the company’s senior vice president for investments, explained in an email. “Full control and operational responsibility for the assets sit with Sophia and the end user, who will determine between them how operations are handled.”

Sophia’s satellites are designed to deliver on-orbit edge data services for a wide variety of applications. “The demand we are underwriting exists today,” Yergan said. “Earth observation, weather and supply-chain analytics, disaster response and defense ISR [intelligence, surveillance and reconnaissance] users all face the same constraint now: They collect far more data than they can bring to the ground, and its value decays while it waits to be downlinked. Processing on orbit addresses that directly.”

The constellation’s first launch is targeted for as early as 2028. SLI would pay out funds linked to development and launch milestones, all the way through verification that the on-orbit network performs to pre-agreed standards.

The arrangement is laid out in a non-binding letter of support. “The non-binding nature is a reflection of where we are in the process, and is typical of large asset financings,” Yergan explained. “It sets the commercial framework so both parties can commit resources while definitive documentation is negotiated.”

Leasing arrangements are often seen in aviation and the maritime industry, but this is a relatively new concept for satellite ventures.

“This is the first time that this approach has been applied to this kind of constellation, but not the first time for in-space assets,” said Gareth Zundel, SLI’s senior vice president for communications. “In December 2025 we announced the acquisition of two AscendArc satellites that will be offered to operators on leasing terms. Then, in March this year, we did a similar deal with ReOrbit. We do believe, however, that we are the first leasing company to specialize in the space sector.”

Rob DeMillo, Sophia Space’s CEO and co-founder, said the arrangement demonstrates how far the commercial space industry has come.

“Asset financing didn’t invent aviation or shipping, but it accelerated them at scale,” he said in a news release. “We’re doing the same for orbital computing. This approach with SLI signals that Sophia Space’s space infrastructure is mature enough to attract the capital structures that have historically built terrestrial infrastructure.”

The approach also gives Sophia Space — which is headquartered in Pasadena, Calif., but also has strong ties to the Seattle area — access to capital without diluting the equity held by current investors, including Unlock Venture Partners in Seattle.

“Sophia has the technology, the team and the vision. What had been missing was access to scalable, non-dilutive capital,” said Praveen Vetrivel, SLI’s CEO. “This framework provides it, giving them the capacity and flexibility they need to build the next layer of digital infrastructure.”

Each of the 10 satellites in the constellation will link together six of Sophia’s TILE (Thermal Integrated LEO Edge) modules, with four Nvidia Jetson processors on each module. That adds up to 240 edge computing servers in orbit.

“These 10 spacecraft are dedicated to this transaction,” Yergan said. “Sophia’s other programs and partnerships involve separate spacecraft and separate funding and are not directly affected by this facility.”

Sophia Space has previously said that it plans to start selling TILE systems and related components to customers in 2028. The company is also collaborating with Axiom Space, Armada and Kepler Communications on separate in-space computing initiatives.

In June, Sophia Space announced the conclusion of a $7 million financing round that brought the company’s total funding to $22 million. That round took advantage of an arrangement known as a Simple Agreement for Future Equity, or SAFE, in which investors provide cash to a startup in exchange for the right to receive stock later.

Sophia Space has secured a patent for a technology that could pave the way for solar-powered orbital data centers that passively radiate excess heat into space.

Developed in partnership with Caltech, Sophia’s architecture tackles a major hurdle in orbital computing: how to cool thousands of chips running artificial intelligence applications in space.

Traditional designs rely on satellite-wide radiator systems with heat pumps and circulating fluids. In contrast, Sophia plans to build flat, modular tiles equipped with four processors each. The tiles draw power from solar cells on their sunlit side, and shed heat into the cold vacuum of space from their dark side.

This approach avoids having to put a cooling system in the central bus of every satellite, said Leon Alkalai, Sophia Space’s co-founder, chairman and chief technology officer. “I think you will find in time that our approach is much more favorable when we scale to larger wattage systems, because bringing everything into a bus can only be done until a certain level, and then it becomes almost impossible to do,” he told GeekWire. “Our benefit is really scalability.”

An added benefit of the satellite design is that each tile is powered independently. “The connectivity between the tiles is with fiber optic connectors,” Alkalai said. “Only data is shared. No power, no thermal, no copper wires. It’s just fiber optic links.”

Alkalai and his team came up with a fitting acronym for the design of the modules: TILE, which stands for Thermal Integrated LEO Edge. (LEO stands for “low Earth orbit.”)

How it all began

Alkalai founded Sophia Space after he finished up a 32-year career at NASA’s Jet Propulsion Lab and transitioned to the space startup world in 2021. The company is headquartered in Pasadena, Calif., but also has corporate connections to Seattle. This week, Alkalai was one of the featured speakers for Seattle Tech Week.

The TILE approach to orbital electronics came out of a Caltech research project that initially focused on space solar power systems.

“That was before 2022, when ChatGPT was announced,” Alkalai said. “Once that happened, within a year, all hell broke loose in the data center world, saying we need a thousand times more energy to power AI — and our reason to exist just skyrocketed.”

Putting data centers in orbit would get around some of the problems associated with terrestrial data centers — for example, the mushrooming requirements for real estate and the huge drain on electrical grids. But the cooling issue has loomed as a key impediment for orbital computing.

Alkalai said the “eureka moment” came when he and his fellow researchers came up with a way to balance out the solar power absorbed by the front of the tile, the power requirements for the processing chips, and the heat radiating out the back. “We did the basic math and said, ‘Oh my God, this can work,'” he recalled.

The patent application for “Space-Based Data Centers” was filed in October 2024, and the patent was granted to Sophia Space and Caltech on July 14. In addition to Alkalai, six other members of the team are listed as inventors: John Brophy, Jonathan Sauder, Timothy McElrath and Douglas Sheldon at JPL; Sergio Pellegrino at Caltech; and Don Hunter, a JPL retiree.

In a news release, Brophy said the TILE architecture “was developed as part of JPL’s mission to address challenges of national significance by applying unique JPL talent.”

“This is an illustration of how JPL, Caltech and private industry can work together to rapidly develop solutions to difficult technical problems for the benefit of the nation,” he said.

Where it’s all going

Alkalai said his fellow inventors will share in the fruits of the patent. “All of them are involved in Sophia, and they have equity in the company,” he said. “And with Caltech, we’ve signed a contract to continue doing research with Sergio Pellegrino and his students. … We are continuing this effort with the original inventors. They are consulting and are equity holders of Sophia.”

The development timeline calls for Sophia to fly its first technology demonstrator next year. “We’ve announced that we are partnering with Apex satellites,” Alkalai said. “We’re using their Nova bus … and that will be the first-ever tech demo of a tile with four GPUs.”

Alkalai said Sophia Space plans to start selling TILE systems and related components to customers in 2028, and start testing the system’s capabilities with a constellation of four to six satellites in the 2029-2030 time frame.

“What that will do is demonstrate the end-to-end system,” he said. “Then, in the new decade, we can scale up to larger numbers in the constellation, larger numbers of tiles, and so on.”

Alkalai said obtaining the newly issued patent is part of Sophia’s plan to build up a strong portfolio of intellectual property.

“If anybody wants to license or use our TILE and use our scalable approach, we could turn that into a business,” he said. “Protecting your IP is not only to deny, it’s also to enable. And I see it more as the latter. Why would somebody fight it? They could license it, and we could make this applicable all over the world.”

Alkalai said the orbital data centers that are being planned by other companies — for example, SpaceX’s ambitious Starmind network and the satellite constellation envisioned by Redmond, Wash.-based Starcloud — don’t appear to be designed to take advantage of passive cooling and would thus raise no questions of infringement on Sophia Space’s patent. But he suspects that the TILE architecture will eventually become the standard for orbital data centers.

“I’ve been on this quest for five years, and I really feel very, very good about this particular topic, because I think it’s of benefit to humanity,” Alkalai said. “This is not just a money issue, or about benefits to me or my team. I just think this is a good direction for humanity as we evolve into a space economy.”