A proposed merger between Elon Musk’s SpaceX and artificial intelligence startup xAI could inject fresh momentum into plans to deploy space-based data centers, intensifying competition with technology giants such as Alphabet and Meta in the rapidly expanding AI sector.
PSG, Real Madrid Head to Champions League Play-Offs as Heavyweights Miss Direct Last-16 Berths
According to reports, the move would strengthen Musk’s broader strategy to shift large-scale AI computing into orbit, where solar-powered satellites could one day handle the enormous processing demands of systems such as xAI’s Grok and OpenAI’s ChatGPT.
Space-based data centers remain an early-stage concept. The idea involves deploying hundreds of interconnected satellites equipped with computing hardware, powered primarily by solar energy. Proponents argue that operating above Earth’s atmosphere would provide near-continuous access to sunlight and eliminate the need for costly cooling systems, potentially making AI operations more energy efficient.
However, experts warn that commercial deployment is still years away, citing challenges including space debris, radiation damage to hardware, limited maintenance options and high launch costs.
Deutsche Bank estimates that initial small-scale orbital data center tests could begin in 2027–28, with larger constellations involving hundreds or even thousands of satellites likely emerging in the 2030s, provided early trials prove successful.
SpaceX’s extensive experience in satellite deployment through its Starlink network places it in a strong position to lead such efforts. Speaking recently at the World Economic Forum in Davos, Musk said that space could soon become the lowest-cost location for AI infrastructure, predicting the shift could happen within two to three years.
SpaceX is also considering an initial public offering that could value the company at more than $1 trillion, with part of the proceeds expected to support development of orbital AI infrastructure.
Meanwhile, rivals are advancing similar concepts. Jeff Bezos-backed Blue Origin is exploring space-based computing, while Nvidia-supported Starcloud recently launched Starcloud-1, carrying an Nvidia H100 chip — the most powerful AI processor yet placed in orbit — to demonstrate in-space AI training.
Google is also pursuing orbital computing through its Project Suncatcher, aiming to connect solar-powered satellites equipped with its Tensor Processing Units into an AI cloud, with a prototype launch planned around 2027.
China has announced parallel ambitions, unveiling plans for a “Space Cloud” that would establish gigawatt-class AI infrastructure in orbit over the next five years.
As global tech leaders race to secure the future of artificial intelligence, space-based computing is emerging as a potential new frontier — though one still facing major technical and economic hurdles.
