Space data centres face significant engineering challenges

Tech leaders like Elon Musk and Jeff Bezos propose launching data centres into orbit to power AI's massive computing needs, but experts highlight formidable hurdles. From vast solar panels and cooling issues to radiation risks, building such facilities in space remains far off. Projects like Google's 2027 prototypes show early interest, yet production-scale viability is distant.

The surge in demand for generative AI, such as ChatGPT, has intensified the need for enormous data centres requiring gigawatts of power—comparable to that consumed by millions of households. On Earth, these facilities increasingly rely on unsustainable energy sources like natural gas, as renewables struggle to provide the necessary scale and reliability.

To address this, figures like Elon Musk and Jeff Bezos have floated the idea of orbital data centres in low Earth orbit, harnessing constant sunlight via solar panels for uninterrupted power. Bezos, through his company Blue Origin, predicts gigawatt-scale facilities could emerge in 10 to 20 years.

Google is advancing more tangible efforts with Project Suncatcher, planning to launch two prototype satellites equipped with its TPU AI chips in 2027. Meanwhile, Nvidia-backed Starcloud made strides this year by deploying a single H100 graphics processing unit in space, though this pales against the million such chips reportedly used by OpenAI.

Experts remain skeptical about near-term feasibility. Benjamin Lee from the University of Pennsylvania states, “From an academic research perspective, [space data centres] are nowhere near production level.” Key obstacles include the immense physical footprint: AI's power demands necessitate square kilometres of solar panels, while cooling in the vacuum of space relies solely on radiating heat away, without Earth's evaporative methods. Lee notes, “Square kilometres of area will be used independently for both the energy, but also for the cooling.” Starcloud envisions a 5000-megawatt centre spanning 16 square kilometres—400 times the area of the International Space Station's solar arrays.

Additional challenges encompass high-energy radiation that can induce computational errors, necessitating restarts and error corrections, thus imposing a “performance discount” compared to Earth-based systems. Coordinating thousands of satellites would demand precise laser communications, complicated by atmospheric interference with Earth links.

Krishna Muralidharan at the University of Arizona views these as surmountable: “It’s not a problem, it’s a challenge,” citing potential innovations like thermoelectric devices to recycle heat into electricity. He adds, “It’s a question of when and not if.”

Looking ahead, even if AI's computational hunger plateaus—as early signs suggest with training requirements potentially peaking—space data centres could still aid lunar exploration or Earth observation, per Muralidharan.

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Elon Musk announces SpaceX-xAI merger at podium, with screen showing orbital AI data centers, Starships, and Mars visions.
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SpaceX acquires xAI to power AI with space data centers

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Elon Musk announced on February 2, 2026, that his SpaceX company has acquired his AI startup xAI, aiming to build orbital data centers to meet surging electricity demands for artificial intelligence. The merger integrates AI, rockets, and satellite technology to create a vertically integrated innovation engine. Musk envisions this enabling advancements like Moon bases and Mars colonization.

SpaceX has filed an application with the Federal Communications Commission to deploy up to one million satellites forming an orbital data center powered by solar energy to meet AI computing demands. The proposed network would vastly exceed current satellite numbers in orbit. The FCC will review the request, likely adjusting the scale as it has in past approvals.

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Elon Musk has announced the absorption of his AI company xAI into SpaceX, his space firm, to develop data centers in orbit. The merger aims to meet the growing electricity demand for AI by combining space-based solar power and orbital infrastructure. The project aligns with Musk's broader ambitions for space exploration.

Elon Musk met with SpaceX's Brent at midnight to oversee xAI's new Colossus 2 supercomputer, set to become the world's largest and most powerful data center. The facility is incorporating over $375 million worth of Tesla Megapacks for sustainable energy to support advanced AI workloads.

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Elon Musk appears to be consolidating his companies, with Tesla halting production of key models to focus on AI robots and investing in xAI. Reports indicate plans to merge SpaceX with Tesla or xAI to prepare for a stock market listing. This move aims to bolster AI development amid growing resource demands.

xAI has acquired a third building to expand its AI infrastructure, boosting total training compute to nearly 2 gigawatts. This setup includes a $400 million Tesla Megapack energy storage system and will pair with over $30 billion in GPUs once fully built. The project positions it as the most powerful AI compute facility globally, though future developments may dwarf it.

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As opposition to data centers grows over energy and environmental concerns, industry groups are launching aggressive advertising campaigns promising jobs and clean energy. In Virginia, the epicenter of data center development, groups like Virginia Connects have spent heavily on ads to improve the sector's image. Critics argue these claims exaggerate job creation and ignore the facilities' resource demands.

 

 

 

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