Will We Put Data Centers in Space?

Several major technology companies are exploring orbital data centers (ODCs) as a solution to energy constraints limiting AI compute expansion. The economic viability of ODCs depends critically on SpaceX's Starship achieving dramatic reductions in launch costs—space-based solar could reach cost parity with terrestrial power at $250/kg to orbit and become cheaper at $50/kg, compared to current costs of $1,500/kg. While thermal management and radiative cooling are manageable challenges, ODCs face significant obstacles including radiation damage, limited inter-satellite bandwidth for training workloads, and supply chain immaturity, making them unlikely to represent meaningful compute capacity before 2030.