AI Data Centers In Space Becoming More Than Just A Moon Shot

The race to build AI infrastructure in space is rapidly moving from science fiction toward reality. 

Three new indications that data centers in space are becoming a legitimate idea emerged this week: a $2B valuation for a space computing startup, a response from NASA over a Jeff Bezos-backed orbital data center venture, and a potential data center partnership between two of the biggest names in the business world.

Google and SpaceX are in negotiations on a rocket-launch deal in which Elon Musk’s firm would carry Google’s data center units in space, The Wall Street Journal reported Tuesday. 

Like many of the world’s largest tech firms, SpaceX and Google have begun steering resources toward making orbital data centers for artificial intelligence computing a reality, driven by the promise of limitless free, uninterrupted solar power.

Google is looking for a launch partner for what it is calling Project Suncatcher. The program, announced in November, aims to create an AI data center in low Earth orbit, with computing spread across a tightly knit array of satellites. A pair of prototype satellites carrying Google’s proprietary AI chips are scheduled to launch by early 2027.

“There’s no doubt to me that a decade or so away, we’ll be viewing it as a more normal way to build data centers,” Google CEO Sundar Pichai said following Project Suncatcher’s unveiling, according to the WSJ.

While Google is steering meaningful resources toward its orbital data center efforts, Musk has also made space-based AI computing the centerpiece of SpaceX’s business model and his vision for the company’s future. Musk has privately described SpaceX’s planned trillion-dollar initial public offering as a potential vehicle to finance the space-based computing push, Axios reported.

Earlier this year, SpaceX filed a request with the Federal Communications Commission to deploy a constellation of up to a million solar-powered satellites designed to function as AI data centers. Shortly thereafter, Musk merged SpaceX with xAI, with the spaceflight giant acquiring the AI computing firm — a move explicitly made with space-based data centers in mind. 

Orbital data centers were also part of SpaceX’s landmark deal with Claude maker Anthropic earlier this month. While the deal centered around Anthropic’s use of 300 megawatts of computing at SpaceX’s Colossus data center cluster in Memphis, Tennessee, Anthropic expressed interest in partnering with SpaceX to locate AI computing capacity in space, the WSJ reported. 

Although Google is reportedly in talks with multiple private launch providers in addition to SpaceX about potential orbital data center deployments, its willingness to work with one of its chief AI rivals underscores a central challenge facing the emerging sector: getting the infrastructure into orbit in the first place.

Launch costs — and the limited availability of rockets capable of carrying data center nodes into space at the scale envisioned — remain among the biggest obstacles to the concept’s feasibility.

But companies across the nascent industry are now deploying significant capital toward navigating this bottleneck with an eye on deploying space-based computing in the near future.  

“There's a lot of new rockets that are coming online, but as we look three, four years out, it's still very, very scarce,” Baiju Bhatt, founder of space data center startup Cowboy Space, told TechCrunch this week. “I think that you're going to see a lot of the first-party rocket providers actually specialize into their own payloads.”

Cowboy Space, previously called Aetherflux, closed on a $275M funding round this week with a business case centered on addressing this lack of launch options. The new capital infusion, which values the company at close to $2B, will fund not just the development of orbital AI data centers but also rockets to launch them.

The firm is developing an integrated data center and launch system, with AI computing nodes incorporated into the rocket’s second stage. According to Bhatt, the first launch of the new system is expected by the end of 2028. 

Another firm planning to deploy orbital data centers on its own rockets is Jeff Bezos’ Blue Origin. The private spaceflight firm hopes to deploy an array of 51,600 satellites that will effectively act as a single data center, an effort dubbed Project Sunrise.

This week, NASA submitted a filing to federal regulators objecting to the proposed satellite constellation. The space agency outlined several concerns, largely pertaining to the computing cluster’s potential interference with manned spaceflight and other satellites used for scientific research. 

While the filing represents a setback for Blue Origin, the fact that NASA decided to raise concerns about Project Sunrise with another federal agency — and has done the same for other orbital data center proposals — underscores that the agency views these projects as credible near-term possibilities rather than an unrealistic moon shot that can be ignored. 

The space agency's filing also expresses interest in working with Blue Origin to address the concerns it outlined, Data Center Dynamics reported. 

“NASA understands the importance of American superiority in space, fostering continued commercial innovation,” the filing says.