Google and SpaceX are in talks to launch orbital data centers in space. The potential deal comes as SpaceX gears up for its $1.75 trillion IPO later this year, selling investors the idea that data centers in space will be the cheapest place to put AI compute within the next few years. It also comes in the wake of Anthropic’s deal with SpaceX last week to use computing resources from xAI’s data center in Memphis, Tennessee, with the potential to work together on orbital ones in the future.
Google is also reportedly in discussions with several other rocket-launch providers. The company is aiming to deploy prototype satellites by 2027 under Project Suncatcher, an initiative unveiled late last year.
Elon Musk has generated significant buzz around orbital data centers, arguing that they are more cost-effective to operate. Supporters also note that space-based facilities avoid the local opposition often faced by ground-based data center projects in the U.S. However, as TechCrunch recently reported, terrestrial data centers currently remain far less expensive once satellite manufacturing and launch expenses are taken into account.
According to regulatory filings, Google invested $900 million in SpaceX in 2015.
The Challenges persist -
Despite the enthusiasm, significant economic hurdles remain. A recent analysis by Bitcoin World found that today’s terrestrial data centers are substantially cheaper than orbital alternatives once satellite construction and launch costs are factored in. Launch costs, while declining, still add a premium of several hundred percent per kilowatt of compute capacity compared to ground-based facilities.
