SpaceX Aims for Data Centers in Orbit as AI Strains Infrastructure

SpaceX is seeking federal approval to launch up to 1 million solar-powered satellite data centers into orbit, pitching the concept as a way to meet surging demand for compute and energy without adding strain to Earth’s power grids, water supplies or local zoning rules.

The proposal, disclosed in filings with the Federal Communications Commission, would place computing infrastructure in low Earth orbit, drawing near-continuous solar energy and connecting directly to satellite networks rather than terrestrial fiber and power lines. Reuters reported that the plan is framed as a response to the rapid growth of artificial intelligence (AI) workloads, which are pushing conventional data centers toward energy, land and cooling constraints.

While the filing is early and highly ambitious, it is drawing attention because it reframes space as a potential extension of cloud infrastructure itself.

Orbital Compute

SpaceX’s application describes a constellation of satellites equipped with onboard computing and powered primarily by solar energy. According to Data Center Dynamics, the satellites would process data in orbit and relay results back to Earth or to other satellites, reducing the need to move large volumes of raw data across terrestrial networks.

The idea builds on SpaceX’s existing Starlink network, which already operates thousands of satellites providing broadband connectivity. What is new is the shift from transmission to computation. Instead of satellites acting mainly as relays, the proposal envisions them performing energy-intensive tasks such as AI inference, real-time analytics and data filtering before information ever touches the ground.

Axios reported earlier this year that SpaceX executives see orbital data centers as a way to bypass bottlenecks that are slowing new facilities on Earth, including community opposition, long interconnection queues and limits on water use for cooling.

While the scale described by SpaceX is unprecedented, the underlying concept has been circulating for several years. Forbes said that advances in launch economics, satellite miniaturization and AI-specific hardware have made space-based computing less speculative than it once was, even if commercial deployment remains uncertain.

The Case for Space as an Extension of the Cloud

The case for orbital data centers rests on a mix of physics, economics and regulation. In orbit, solar panels can generate power for most of the day without weather disruptions, eliminating fuel costs and reducing reliance on fossil-heavy grids. Space also removes local land-use battles and water constraints that increasingly shape where data centers can be built.

There is also a networking argument. Proximity to satellite constellations could support low-latency processing for applications such as Earth observation, defense, logistics tracking and global communications. Instead of transmitting massive datasets back to Earth for analysis, systems could process information in space and send down only the results.

The counterarguments are equally significant. Launching and maintaining hardware in orbit remains expensive. Repairs are difficult, and debris management is a growing concern. Regulators and astronomers have already raised alarms about the impact of large constellations on orbital congestion and night-sky visibility. Any move from thousands of satellites to hundreds of thousands or more would intensify those debates.

Limits, Risks and the Road Ahead

SpaceX’s filing does not mean space-based data centers are imminent. Approval from the FCC would cover spectrum use, not fully operational clearance, and the company has not disclosed timelines, customers or detailed technical specifications. Still, the proposal is forcing policymakers and the cloud industry to grapple with a question that until recently sounded theoretical: whether space could become a meaningful part of global computing infrastructure.

If AI continues to drive exponential growth in compute demand, the pressure on terrestrial energy systems is unlikely to ease. Whether orbital data centers become a niche supplement or a core layer of the cloud will depend on economics, regulation and technology that are still evolving.