WASHINGTON: A proposed merger between Elon Musk’s SpaceX and artificial intelligence firm xAI could accelerate Musk ambition to deploy AI data centres in space, as competition intensifies in the global race to dominate advanced artificial intelligence.
Read More: Jeff Bezos Predicts Space-Based Data Centres Within Decades
Space-based AI data centres remain an early-stage concept but are designed to rely on large constellations of solar-powered satellites linked together in orbit. These satellites would handle the massive computing demands of AI systems such as xAI’s Grok, at a time when energy-intensive data centres on Earth are becoming increasingly expensive to operate.
ELON MUSK: “If civilization continues, A.I in space is inevitable. In order to achieve any meaningful percentage of a Kardashev II scale civilization where you’re using even a millionth of the sun’s energy, you must have solar powered AI satellites in deep space.
My estimate is… pic.twitter.com/uFzGtSPNvc
— DogeDesigner (@cb_doge) December 15, 2025
“It’s a no brainer for building solar powered AI data centers in space, you just have solar panels facing the sun, & a radiator that’s pointed away from sun, then it’s just cooling. The lowest cost place to put AI will be space, & that’ll be true within 3 years.”
一 Elon Musk pic.twitter.com/ehKVrczZGz
— DogeDesigner (@cb_doge) January 22, 2026
Proponents argue that operating above Earth’s atmosphere provides near-constant access to solar energy while eliminating the need for complex cooling systems that account for a large share of ground-based data-centre costs. Heat can be radiated directly into space, potentially making AI computing more energy-efficient.
However, engineers and space experts warn that commercial deployment is still years away. Key challenges include exposure to space debris and cosmic radiation, limited options for maintenance, and the high cost of launching and replacing hardware. Deutsche Bank estimates that initial small-scale orbital data-centre tests could begin in 2027–28, with large-scale deployments possible only in the 2030s if early missions succeed.
Musk has repeatedly argued that space offers the lowest-cost environment for AI computing. SpaceX’s extensive launch capabilities and experience deploying thousands of Starlink satellites place it in a strong position to build or support orbital AI infrastructure. Reuters has reported that SpaceX is considering an initial public offering that could help fund such projects.
Read More: SpaceX final 2025 launch set for COSMO-SkyMed mission
Other technology leaders are also exploring the idea. Jeff Bezos’ Blue Origin has backed research into orbital data centres, while Nvidia-supported Starcloud recently launched a satellite carrying an advanced AI chip. Google and China have also announced plans to test space-based AI computing in the coming years.