Why 3 tech giants are racing to put data centers in space

A recent alleged missile strike on an Amazon data center in Bahrain is accelerating a radical solution to terrestrial threats and AI's insatiable energy needs: moving data centers into orbit. Tech giants including Google, SpaceX, and Blue Origin are now in a race to build this new class of infrastructure, betting billions that space-based computing can solve Earth-bound problems, even as critics question the astronomical costs and security risks.

"Within a decade, space data centers will become the new normal," Google CEO Sundar Pichai has claimed, outlining a plan to launch two prototype satellites by 2027 to test the core technologies.

The plans are ambitious. Google's "Sun Chaser Plan" involves a constellation of 81 small satellites in a sun-synchronous orbit, allowing them to harvest solar power continuously. These satellites, equipped with Google's own TPU AI chips, would be linked by lasers capable of 1.6 terabits per second. Blue Origin has filed to launch 50,000 satellites, while SpaceX has applied for up to one million to meet what it calls the "explosive growth in AI-driven data needs."

The core challenge is balancing immense cost with long-term benefit. Critics argue the economics are untenable, with one physicist estimating a single space data center could cost $20 billion to build and launch. Yet, Google projects that if launch prices fall to $200 per kilogram by 2035, the operating cost of an orbital data center could rival the electricity costs of a terrestrial one, offering a potential solution to AI's growing power consumption.

The $20 Billion Question: Cost vs. Security

Proponents and opponents are divided by a fundamental disagreement on risk. Tech companies see a clear path to harnessing the limitless solar energy of space, while security experts see high-value assets in predictable, vulnerable orbits. "You can put data centers in space. It's not physically impossible. I just don't understand why you would," said Matthew Buckley, a physicist at Rutgers University.

The costs are staggering. One startup, Lonestar Data Holdings, signed a $120 million contract for just six storage satellites, representing a fraction of a typical ground data center's capacity. Yet, investors are pouring money in. Starcloud, a startup that successfully trained an AI model in orbit in December 2025, reached a $1.1 billion valuation after a $170 million funding round.

A New Front for Conflict?

The move to space introduces a new set of vulnerabilities. While a data center in orbit is safe from terrestrial missile strikes, it becomes a target in a predictable path. "Those who advocate for space-based data centers had better come up with a security plan," one analyst wrote, highlighting that anti-satellite missile capabilities are already proven.

Google has addressed the threat of space radiation, finding its TPU chips are more resilient than expected, withstanding radiation doses up to 15 kilorads—well beyond the 750 rads estimated for a five-year mission. However, threats from space debris, solar flares, and developing anti-satellite technologies remain significant concerns. The debate is no longer just about cost per kilowatt-hour; it's about the probability of each satellite being shot down.

This article is for informational purposes only and does not constitute investment advice.