The Race to Build Data Centers in Space

Google wants to build solar-powered data centers — in space | Semafor

Google Joins Growing Movement to Solve AI's Energy Crisis

Multiple tech giants and startups are betting that the future of computing lies beyond Earth's atmosphere

The artificial intelligence revolution has created an unprecedented problem: Earth is running out of energy to power the massive data centers needed to train and run AI models. Now, a diverse coalition of tech giants, billionaires, and startups believes they've found the solution — build the data centers in space.

Google announced Project Suncatcher on November 4, 2025, revealing plans to launch solar-powered satellites equipped with its Tensor Processing Unit (TPU) AI chips into low-Earth orbit. The company plans to launch two test satellites, each carrying four TPUs, in 2027 in partnership with Planet Labs.

But Google is far from alone in this audacious vision. The concept of space-based data centers has evolved from science fiction to serious business strategy, with industry heavyweights and innovative startups racing to make orbital computing a reality.

The Energy Crisis Driving the Space Race

Former Google CEO Eric Schmidt warned during congressional testimony that some companies are designing data centers requiring as much as 10 gigawatts of power — roughly ten times the output of an average US nuclear power plant — with data centers potentially needing an additional 29 gigawatts within just a few years and up to 67 more gigawatts by 2030.

The environmental toll is equally staggering. Data centers currently consume around 1% or 2% of the world's electricity, a number that could double by 2030 according to a Goldman Sachs report. These facilities also use massive amounts of water for cooling and release heat, noise, and greenhouse gases affecting local communities.

Space offers tantalizing solutions to these problems. In the right orbit, a solar panel can be up to 8 times more productive than on Earth and produce power nearly continuously, reducing the need for batteries. The vacuum of deep space serves as an infinite heat sink, with waste heat radiating into space, conserving significant water resources since water isn't needed for cooling.

The Major Players

Google's Project Suncatcher

Google's approach envisions compact constellations of solar-powered satellites carrying TPUs and connected by free-space optical links, placed in a dawn-dusk sun-synchronous low-Earth orbit. The company theorizes an 81-satellite cluster with a 1 kilometer radius, requiring extremely high-bandwidth, low-latency connections between satellites — tens of terabits per second — with spacecraft flying in very close formation of kilometers or less.

The radiation challenge is significant. Google took its chips to a facility at the University of California, Davis, using a particle accelerator to irradiate the processors to simulate years of solar exposure in space. While High Bandwidth Memory subsystems were the most sensitive component, they only began showing irregularities after a cumulative dose of 2 krad(Si) — nearly three times the expected five-year mission dose of 750 rad(Si), with no hard failures up to the maximum tested dose of 15 krad(Si).

Google's analysis suggests that with sustained learning rates, launch prices may fall to less than $200/kg by the mid-2030s, making the cost of launching and operating a space-based data center roughly comparable to the reported energy costs of an equivalent terrestrial data center.

Jeff Bezos and Blue Origin

Amazon and Blue Origin founder Jeff Bezos stated at Italian Tech Week in Turin that he believes gigawatt-scale data centers will be deployed in space in 10+ years, predicting they would "beat the cost of terrestrial data centers in the next couple of decades."

Bezos argues that space offers uninterrupted solar power with no weather or night interruptions, framing the move as part of an established pattern where orbital infrastructure supports life on Earth, just as weather and communication satellites already do.

Eric Schmidt and Relativity Space

In 2025, former Google CEO Eric Schmidt acquired Relativity Space, a private spaceflight company developing the Terran R rocket capable of carrying up to 33,500 kg of cargo into low-Earth orbit. When a commenter on social media suggested the purchase could be a step toward deploying data centers in space, Schmidt responded with a single word: "Yes."

Schmidt's acquisition gives him privileged access to one of the few independent aerospace companies still working on new rocket technology, at a time when SpaceX and Blue Origin are largely entwined with their billionaire founders' political fortunes and personal ambitions.

Elon Musk and SpaceX

Elon Musk claimed that SpaceX "will be doing" data centers in space, saying the company's next-generation V3 Starlink satellites could serve as a foundation for eventual data centers by being scaled up. Musk stated that Starship could deliver 100GW/year to high Earth orbit within four to five years, with 100TW/year possible from a lunar base producing solar-powered AI satellites locally.

Startups Leading the Charge

Starcloud (formerly Lumen Orbit)

Washington-based startup Starcloud plans to build a 5-gigawatt orbital data center with super-large solar and cooling panels approximately 4 kilometers in width and length. The company projects energy costs in space to be 10 times cheaper than land-based options, even including launch expenses.

Starcloud is about to launch its Starcloud-1 satellite, carrying Nvidia's H100 GPU, which is expected to offer 100 times more powerful GPU computing than any other space-based operation. The Starcloud-1 satellite, about the size of a small refrigerator, will test Google's Gemma language model in orbit, marking the first time a large AI model operates in space.

Lonestar Data Holdings

Florida-based Lonestar Data Holdings achieved a historic milestone on March 5, 2025, with the successful commercial test and operation of its data center en route to the Moon on Intuitive Machines' Athena Lunar Lander. The company's Independence data center payload landed on the Moon on February 22, 2024, marking the first time data center technology reached the lunar surface.

Lonestar is planning to launch six data storage spacecrafts between 2027 and 2030, each carrying multi-petabytes worth of storage and edge processing capability, orbiting the Moon at the Lunar L1 Lagrange Point. The company already has government and enterprise customers on board, including working with the state of Florida to provide data storage.

Axiom Space

In April 2025, Axiom Space announced the upcoming launch of its first two Orbital Data Center nodes to low-Earth orbit by the end of 2025. In August 2025, Axiom launched its Data Center Unit One (AxDCU-1) to the International Space Station, a shoebox-sized prototype powered by Red Hat Device Edge.

By 2027, Axiom plans to have at least three ODC nodes interconnected and interoperable with each other, providing services to any satellite and spacecraft with compatible optical communication terminals. The nodes will provide secure, scalable, and cloud-enabled data storage and processing, and AI/ML solutions directly to satellites, constellations, and other spacecraft in Earth's orbit, with the capability to operate independently of terrestrial infrastructure.

European Initiatives

The European Space Agency funded a project through its Discovery element exploring space-based data centers, with a team from ESA, KP Labs, and IBM examining this futuristic idea. A project called ASCEND (Advanced Space Cloud for European Net Zero Emission and Data Sovereignty), led by Thales Alenia Space on behalf of the European Commission, concluded that such data centers are feasible and could help the region meet its carbon neutrality goals by 2050.

Technical Challenges

The ambitious vision faces formidable engineering hurdles:

Radiation Hardening: Bit barn operators will have to contend with bit-flips on a fairly regular basis unless the hull can be sufficiently hardened against charged particles from the sun and cosmic rays from the outer reaches of space — standard ECC probably isn't going to cut it.

Heat Dissipation: Even with an abundant supply of power, an orbital datacenter would still need a way to reject a gigawatt of thermal energy through radiation. For reference, the ISS's radiators are capable of rejecting about 70 kilowatts of thermal energy.

Communication Latency: Depending on how high up these datacenters are parked, access latencies will be on the order of 20-40ms for low Earth orbit and upwards of 600ms for geostationary satellites.

Maintenance and Upgrades: Hardware upgrades require launching components on rockets, where costs remain substantial despite efforts by SpaceX and Blue Origin to bring prices down through reusable technology.

Hardware Lifetime: Servers need to be replaced every 3-5 years, and sticking a data center in space means the equipment is likely going to stay there for 20+ years, creating challenges for maintaining current technology.

Use Cases and Applications

The early applications for space-based data centers extend beyond simply offloading terrestrial computing:

Real-time data processing in space offers immense benefits for critical applications such as wildfire detection and distress-signal response, reducing response times from hours to minutes by running inference right where the data is collected.

Today's growing fleets of Earth- and space-observing satellites struggle with bandwidth limitations. Before users can glean any insights from satellite observations, the images must be downlinked to ground stations sparsely scattered around the planet and sent over to data centers for processing.

Use cases for orbital data centers include on-orbit and real-time processing, exploitation, and dissemination of data from multiple national security and commercial satellites, lower-latency multi-sensor fusion for terrestrial or space threat detection and tracking, and AI/ML and Large Language Models to enable real-time autonomous decision making for satellites and other space assets.

Economic and Environmental Projections

According to Starcloud CEO Philip Johnston, "The only environmental cost is the launch. After that, we could save ten times the carbon emissions compared with running data centers on Earth."

A number of companies plan to deploy data centers in space, including Axiom Space, Starcloud, NTT, Ramon.Space, and Sophia Space.

The business case depends heavily on continued reductions in launch costs. Google researchers estimated that today's roughly $1,500 per kg on a SpaceX Falcon Heavy rocket could drop to about $200 by 2035, making a space-based data center on par with a terrestrial one on a cost-per-kilowatt basis.

Skepticism and Concerns

Not everyone is convinced the economics make sense. Critics point to numerous unresolved challenges:

Some experts argue that thermal management requires radiators that would need to be kilometers in size, matching the scale of solar panel arrays, and question whether the idea only makes sense if you simultaneously own a space launch company and don't have the first clue about physics or engineering.

There are also concerns about orbital congestion. SpaceX's Starlink and other satellites actively prevent important astronomical observations, and satellite constellations pose problems for science.

The Road Ahead

Despite the challenges, momentum continues to build. Travis Beals, senior director for Paradigms of Intelligence at Google, stated: "We've spent the past year or so trying to think through, what are all the ways this might not work? Can we prove it can't work? And we're still here because we haven't seen any obvious showstoppers."

The convergence of multiple factors — declining launch costs, exponentially growing AI compute demands, environmental pressures, and technological advances in radiation-hardened computing — suggests that space-based data centers may transition from moonshot to mainstream sooner than many expect.

As Bezos stated, "Space will end up being one of the places that keeps making Earth better. It already has happened with weather satellites. It's already happened with communication satellites. The next step is going to be data centers and other kinds of manufacturing."

Whether this vision materializes in a decade or remains perpetually just out of reach will depend on solving fundamental physics, engineering, and economic challenges. But with Google, Amazon, SpaceX, and a growing ecosystem of startups all betting on the same future, the race to build humanity's first orbital data centers is well and truly underway.

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