If you ramp up the economies of scale to make those things - radiation protection and cost per pound - the calculus changes. It's supposed to synergize with Starship, and immediately take advantage of the reduced cost per pound.

If the cost per pound, power, regulatory burden, networking, and radiation shielding can be gamed out, as well as the thousand other technically difficult and probably expensive problems that can crop up, they have to sum to less than the effective cost of running that same datacenter here on earth. It's interesting that it doesn't play into Jevon's paradox the way it might otherwise - there's a reduction in power consumption planetside, if compute gets moved to space, but no equivalent expansion since the resource isn't transferable.

I think some sort of space junk recycling would be necessary, especially at the terawatt scale being proposed - at some point vaporizing a bunch of arbitrary high temperature chemistry in the upper atmosphere isn't likely to be conducive to human well-being. Copper and aluminum and gold and so on are also probably worth recovering over allowing to be vaporized. With that much infrastructure in space, you start looking at recycling, manufacturing, collection in order to do cost reductions, so maybe part of the intent is to push into off-planet manufacturing and resource logistics?

The whole thing's fascinating - if it works, that's a lot of compute. If it doesn't work, that's a lot of very expensive compute and shooting stars.