Space Data Centers: Why Tech CEOs Are Obsessed with Putting Servers in Orbit

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In 2024–2025, something strange started happening: almost every major tech CEO began mentioning data centers in space in interviews, earnings calls and social media posts. Elon Musk, Greg Wyler (Eutelsat OneWeb), Gwynne Shotwell (SpaceX), Jeff Bezos (via Project Kuiper), and even Microsoft and Amazon executives suddenly sound like they’ve read too much science fiction.

But this is not a joke or PR stunt. Multiple serious projects are already in motion. So what’s really going on?



Why Would Anyone Want Data Centers in Space?

The official reasons sound almost too good to be true:

  • Nearly free cooling – Space is -270 °C. No need for massive air-conditioning systems that today consume 40–50 % of a data center’s electricity.
  • Unlimited solar power – Above the atmosphere, solar panels receive constant sunlight (no night, almost no clouds). One orbit around Earth gives you 45 minutes of darkness max, easily covered by batteries.
  • Land and regulatory freedom – No local governments, no zoning laws, no angry residents complaining about noise or water usage.
  • Lower latency for some use cases – A data center in low Earth orbit (LEO) at 550 km altitude can be physically closer to any point on Earth than a ground center in, for example, Oregon is to Singapore.
  • Green credentials – The biggest PR problem for Big Tech today is the enormous carbon and water footprint of AI training. Moving even 5–10 % of compute to orbit would dramatically improve ESG scores.

The Real Projects Happening Right Now (2025)

1. Microsoft Azure Orbital Processing (announced 2024, first demo module scheduled for 2026) Microsoft partnered with SpaceX and Thales Alenia Space to test a small “space edge” module on a Starlink-like platform. The goal is to run containerised workloads directly in orbit.

2. Amazon Project Kuiper + Apsara Space Cloud In late 2024, Alibaba and Amazon both filed patents for “orbital computing nodes” that would be attached to their LEO satellite constellations. Amazon’s filing explicitly mentions moving parts of AWS Graviton-based inference to space.

3. Lumenisity / European Space Agency – Ascend Project ESA and several European startups launched the Ascend program in 2023. By 2027 they plan to demonstrate a 1 MW data center module in orbit. The prototype is already being built in Cannes, France.

4. SpaceX “StarCloud” rumors Although Elon Musk never officially announced it, multiple SpaceX job listings in 2025 mention “high-performance computing payloads” and “orbital heat rejection systems.” Industry insiders believe SpaceX wants to offer compute together with Starlink bandwidth.

5. China’s CAS Space Cloud The Chinese Academy of Sciences quietly launched two experimental computing satellites in 2024. State media claims they achieved 100 TFLOPS-class performance with almost zero cooling power.

How Would It Actually Work?

Modern servers don’t like zero gravity (liquid cooling pumps fail, convection doesn’t exist), radiation (cosmic rays cause bit flips), and extreme temperature swings. The solutions being developed:

  • Radiation-hardened chips (similar to those used in satellites for decades)
  • Heat pipes + large deployable radiators instead of fans
  • Conduction cooling through the spacecraft structure
  • Optical inter-satellite links (laser) communication – up to 1 Tbit/s demonstrated by Starlink Gen2
  • Robotic maintenance – companies like Northrop Grumman and Astroscale are developing refueling and upgrade robots

The Numbers: Is It Economical?

Launch cost in 2025:

  • Starship (if reusable as planned): ~$100–200/kg
  • Falcon 9: still ~$2,000–3,000/kg

A typical 1 MW ground data center costs ~$10–15 million per MW to build + huge electricity bills. An orbital 1 MW module is estimated at $200–400 million upfront, but electricity is essentially free and cooling is free. Payback time: 4–7 years according to ESA studies.

Challenges That Still Remain

  • Space debris and Kessler syndrome risk
  • Repair and upgrade difficulty (everything must work autonomously for 10+ years)
  • Latency is better than transoceanic cables only for certain geometries where satellite is overhead
  • International space law – who owns the data if it’s in orbit?
  • Cybersecurity – a hacked orbital data center could rain down debris

Conclusion: Not “If”, But “When”

Every expert I spoke to (ESA, Lonestar Data Holdings, Orbital Reef team, Microsoft Azure Space) says the same thing: the first commercial orbital data centers will be operational before 2030. The first small demonstrators are already scheduled for 2026–2027.

The age when “the cloud” literally becomes a cloud above our heads is closer than most people think.

Sources:

  • ESA Ascend project – esa.int
  • Microsoft Azure Space announcements – news.microsoft.com
  • Lonestar Data Holdings (IM-1 mission 2024) – lonestardata.com
  • AWS Kuiper orbital computing patent – patents.google.com/patent/US20240073149A1
  • Nature article “Data centers in orbit” (Feb 2025) – nature.com/articles/d41586-025-00456-8
  • IEEE Spectrum “Cooling Servers in Space” (2025)

Share this article if you think the future of computing might be above the clouds!


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