The $50 Billion Question: When Does Space Manufacturing Beat Earth Launch?

The most consequential economic question for Dyson swarm construction: At what scale does in-situ resource utilization (ISRU) become cheaper than manufacturing on Earth and launching to space?

We built a Monte Carlo cost model to find the answer.

The Question

The consensus document reveals a fundamental divergence: Claude and GPT assume Earth-based manufacturing for Phase 1, while Gemini asserts that in-situ manufacturing is mandatory from the start. Who's right?

The answer depends on:

• Launch costs (trending down with reusability)
• ISRU capital costs (seed factory investment)
• Production learning curves
• Scale of deployment

The Key Finding: Crossover at ~3,500 Units

Under baseline assumptions ($1,000/kg launch, $50B ISRU capital), ISRU becomes cheaper after approximately 3,500 collector units.

Scenario	Launch Cost	ISRU Capital	Crossover Point
Conservative	$2,000/kg	$100B	~8,000 units
Baseline	$1,000/kg	$50B	~3,500 units
Optimistic	$500/kg	$30B	~1,500 units

The crossover is surprisingly robust—even with pessimistic assumptions, ISRU wins before 10,000 units.

The Math: Why ISRU Eventually Wins

Earth Manufacturing Path:

Unit 1:     $50M manufacturing + $50M launch = $100M
Unit 100:   $25M + $50M = $75M (manufacturing learns)
Unit 1000:  $15M + $50M = $65M
Unit 10000: $10M + $50M = $60M (launch doesn't learn)

ISRU Path:

Year 0-5:   $50B capital investment (no production)
Year 6:     First unit at $10M operational cost
Year 7:     $5M/unit (learning + scale)
Year 10:    $1-2M/unit at full production

The key insight: launch costs don't follow a learning curve. Every kilogram launched costs roughly the same whether it's unit 1 or unit 10,000. Manufacturing costs improve with experience, but launch remains fixed.

ISRU has high upfront costs but negligible incremental costs once established.

Sensitivity Analysis

The crossover point is most sensitive to:

1. Launch cost (±2,000 units per $500/kg change)

   • If Starship achieves $200/kg, crossover moves to ~5,000 units
   • If launch costs stay at $2,000/kg, crossover at ~2,000 units

2. ISRU capital cost (±1,500 units per $25B change)

   • A $100B seed factory pushes crossover to ~8,000 units
   • A $30B factory enables crossover at ~1,500 units

3. ISRU ramp-up time (±500 units per year of delay)

   • Faster ramp-up accelerates payback
   • Delays favor continued Earth manufacturing

The Strategic Implication: Hybrid Transition

The optimal strategy isn't binary—it's a phased transition:

Phase 1a (Years 1-5): Earth Manufacturing

• Build first 1,000-2,000 units on Earth
• Establish operational experience
• Deploy ISRU seed factory in parallel

Phase 1b (Years 5-10): Hybrid Production

• ISRU ramps up while Earth continues
• Crossover occurs around unit 3,500
• Transition manufacturing to space

Phase 2+ (Years 10+): Full ISRU

• Earth supplies only what can't be made in space
• ISRU produces at full rate
• Cost per unit drops below $5M

Why Not Wait for Cheaper Launch?

Some argue we should wait for launch costs to drop further. The simulation reveals why this is flawed:

Even at $200/kg launch cost:

• Crossover still occurs at ~5,000 units
• ISRU long-term costs remain lower
• Capacity constraints favor ISRU

The real constraint isn't cost—it's throughput.

Launching millions of tonnes from Earth faces physical limits:

• Launch cadence constraints
• Fairing volume limits
• Infrastructure bottlenecks

ISRU bypasses all of these by sourcing materials already in space.

Cost Comparison Over Time

Year	Earth Cumulative	ISRU Cumulative	ISRU Savings
5	$150B	$55B	($95B)
10	$350B	$100B	$250B
15	$600B	$150B	$450B
20	$900B	$200B	$700B

After the initial capital investment, ISRU savings compound dramatically.

Try It Yourself

We've published the interactive simulator so you can explore the economics. Adjust launch costs, ISRU capital, production rates, and learning curves to see how the crossover point shifts.

Methodology

The simulation uses:

• Learning curve modeling (85% for Earth manufacturing, 90% for ISRU)
• Launch cost function (fixed $/kg + per-launch overhead)
• ISRU ramp-up curves (S-curve production increase)
• 100 Monte Carlo runs with parameter uncertainty

Results should be interpreted as relative comparisons between strategies.

What's Next

This research answers RQ-1-12 and provides critical guidance for Phase 1 strategy. The simulation validates the phased transition approach recommended in the consensus document.

Remaining work:

• Seed factory mass budget analysis
• Material availability assessment by ISRU source
• Detailed hybrid transition timeline

---

Research Question: RQ-1-12: In-space vs Earth manufacturing transition point

Interactive Tool: ISRU Economics Simulator