By BlueShift and AFP | 2026-02-11

News that SpaceX will merge with artificial intelligence outfit xAI, in a record-setting transaction that will create a single company valued at $1.25 trillion, has given fresh momentum to the debate about establishing orbiting data centers.

For close to a decade, tech firms have been seriously considering the idea of building data centers in space, tapping into the sun's energy to meet power demands amid a fierce artificial intelligence (AI) race.

"Global electricity demand for AI simply cannot be met with terrestrial solutions," wrote SpaceX founder, CEO and chief technology officer Elon Musk.

"The only logical solution therefore is to transport these resource-intensive efforts to a location with vast power and space."

Late last year, US startup Starcloud sent a refrigerator-sized satellite containing an Nvidia graphics processing unit (GPU) into orbit in what the AI chip maker touted as a "cosmic debut" for the mini-data center.

"The idea is that it will soon make much more sense to build data centers in space than it does to build them on Earth," Starcloud chief executive Philip Johnston said at the time.

Tech giant Google has laid out plans to launch test satellites by early 2027 as part of its Suncatcher project to build solar-powered data centers in space.

Blue Origin, the rocket and satellite company established by Amazon founder Jeff Bezos, is touting a TeraWave space-based high-speed network that can be used by data centers to move information anywhere around the planet.

More than a dozen startups, aerospace leaders, and major tech firms are involved in the development, testing or planning of space-based data centers.

"From a proof concept, it's already there," University of Arizona engineering professor Krishna Muralidharan, who is involved with such work, has said of the technology.

He said he believes space data centers could be commercially viable in about a decade, while Bezos has estimated it might take up to twice that long.

Questions and challenges

Current projects envision relying on clusters of low Earth orbit satellites positioned close enough together to ensure reliable wireless connectivity.

Lasers will connect space computers to terrestrial systems.

The big draw of space for data centers is power supply, with the option of synchronizing satellites to the sun's orbit to ensure constant light beaming onto solar panels.

Building in space also avoids the challenges of acquiring land and meeting local regulations or community resistance to projects.

Yet critical technical aspects of such operations also need to be resolved, particularly harm done to GPUs by high levels of radiation and extreme temperatures as well as the danger of being hit by space debris.

It is not yet clear how malfunctioning or damaged gear would get fixed in an economical way, though Musk-led electric car company Tesla is working on humanoid robots, providing potential maintenance crews in space.

Another obstacle to deploying servers in space has been the cost of getting them into orbit. But a reusable SpaceX mega-rocket called Starship with massive payload potential promises to slash launch expenses.

"Historically, high launch costs have been a primary barrier to large-scale space-based systems," Suncatcher project head Travis Beals said in a post.

But project launch pricing data suggests prices may fall by the mid-2030s to the point at which "operating a space-based data center could become comparable" to having it on Earth, Beals added.

"A lot of the skepticism of data centers in space probably comes from failing to price in the effects of exponential expansion," said University of Florida physics professor and former NASA scientist Phillip Metzger in a recent post on X.

"If AI doesn’t grow exponentially, then I don't think it will make sense very soon to put them in space; but I think it will grow exponentially."