The concept of deploying data centres in orbit is gaining momentum as several companies vie to pioneer this emerging frontier, leveraging advances in reusable rocketry and satellite technology. Among the most prominent players is SpaceX, which recently spotlighted orbital data centres as a key element of its business strategy during its initial public offering. The company envisions manufacturing vast constellations of AI-powered satellites functioning as space-based data centres, potentially numbering in the millions.

SpaceX’s renewed focus on the idea coincides with ongoing efforts to reduce launch costs. Currently, the company’s Falcon rockets charge around $3,000 to $4,000 per kilogram to low-Earth orbit, but the next-generation Starship vehicle promises significant cost reductions. Starship, now in the testing phase, could eventually enable launch rates exceeding one per hour, increasing annual payload capacity to over one million tonnes within three years, according to CEO Elon Musk. Such capacity, experts say, is essential to realizing orbital data centre ambitions.

Nevertheless, skepticism remains among some aerospace experts. Matthew Santer, a professor at Imperial College London, highlights numerous technical challenges, including mitigating radiation damage from cosmic particles and managing heat dissipation in the vacuum of space. Unlike terrestrial data centres which rely on air or water cooling, orbital centres must radiate heat via infrared emissions, a process that could complicate design and increase weight due to shielding requirements or necessitate extensive system redundancy.

Several other ventures are actively exploring the sector. Google’s parent company Alphabet released a white paper advocating space-based data centres powered by solar energy, emphasizing the unparalleled availability of sunlight above the atmosphere. Their proposed approach includes an 81-satellite cluster equipped with solar panels, designed to harness continuous solar power far exceeding Earth-based sources. Complementing this research, Google and Planet Labs plan an early 2027 launch of test satellites under the “Project Suncatcher” initiative.

Smaller companies are also advancing rapidly. Starcloud, co-founded by British entrepreneur Philip Johnston and aerospace engineer Ezra Feilden, has already deployed a trial satellite containing an Nvidia processor. The firm’s long-term goal is to construct a 5-gigawatt data centre powered by a 16-square-kilometer solar array, offering operational costs reportedly one-eighth those of comparable ground facilities.

In the UK, Reading-based NewOrbit recently secured nearly £14 million in investment to develop satellites capable of sustaining low orbits longer than usual by employing proprietary propulsion technology. The company asserts that operating within certain protected orbital zones, such as those partially shielded by Earth’s Van Allen belts, reduces exposure to radiation and space debris—a persistent problem in higher orbits.

Despite the technical hurdles, SpaceX is moving rapidly. Last week, Musk revealed details of its inaugural orbital data centre satellite prototype, named AI1, with a 70-meter wingspan deploying solar panels capable of generating roughly 150 kilowatts—comparable to terrestrial data centre power units. Musk asserted that the technology is well within current capabilities and that no unprecedented breakthroughs are required. SpaceX has also filed with the US Federal Communications Commission for approval to deploy a constellation of up to one million such satellites between altitudes of 800 and 2,000 kilometers.

While the economics and logistics of orbital data centres remain under scrutiny, the combination of falling launch costs, expanding AI demand, and novel solar power strategies continues to fuel investor interest and technological development. Whether these space-based data centres move beyond concept to operational reality within the next decade will depend on overcoming significant engineering challenges and demonstrating clear economic advantages over established terrestrial infrastructure.