 | Tuesday, June 2, 2026 | | Cheap solar power, no angry neighbors, and a whole new set of problems | .jpg) | (Photo by -/ESA/AFP via Getty Images) | The backlash against data centers has arrived. From New York to Florida, legislators are pushing moratoriums and new restrictions on the sprawling facilities that power the
AI boom.
So some of the biggest names in tech are looking up for a fix.
Even
more than the lack of NIMBY issues in space, the fundamental appeal comes down to energy. Solar panels in space generate five to eight times more power than equivalent panels on the ground — no clouds, no atmosphere, no night in the right orbit. For companies facing five-to-ten-year permitting timelines just to break ground on new power plants, that is a tantalizing fix. | | SPONSORED |  | Love books? You’ll love Audible. | Whether you’re commuting, cooking, walking, or winding down, Audible makes it easy to spend more time with the stories you love. Explore bestselling novels, memoirs, mysteries, thrillers, classics, podcasts, and exclusive originals—ready whenever you are. | | |
| Early days, hard mathBut space, it turns out, creates as many problems as it solves.
The same vacuum that makes solar power so productive also traps heat. On Earth, data centers shed heat through air and water cooling. In space there is no air or water, so heat can only escape through large radiating panels.
Radiation is the other concern. Cosmic particles can flip bits in chips, potentially corrupting calculations. Starcloud CEO Philip Johnston has argued that AI inference is surprisingly resilient to this: a poem generated with a flipped bit is still a poem. But a flipped bit in an enterprise financial or logistics workflow is a different matter.
The harder problem to square is the economics. Andrew McCalip, head of research and development at space startup Varda, built a widely circulated interactive model finding that space infrastructure currently runs roughly four
times more expensive per watt than a conventional terrestrial data center.
Closing that gap depends almost entirely on launch costs. SpaceX's Falcon 9 currently runs around $2,700 per kilogram to orbit. Google's own researchers put the break-even threshold at roughly $200 per kilogram, and industry estimates more broadly put it around $500.
Analysts at Citigroup project that Starship, SpaceX's massive next-generation fully reusable rocket that is still ramping toward commercial operations, could reach around $100 per kilogram by 2040, with an optimistic case near $33. That would clear the threshold handily. But terrestrial data center costs have decades of engineering and scale behind them and could keep falling too, which keeps raising the bar that space needs to
clear.
Jeff Bezos, who is building his own orbital data center ambitions at Blue
Origin, said recently that two-to-three year timelines from rivals are "a little ambitious." Replacing a failed server on the ground takes minutes, while in orbit it means launching a new satellite. And matching even a single large terrestrial data center requires
thousands of satellites, raising real questions about debris in already-crowded low-Earth orbit. | | | SPONSORED | .png) | Orlando is where inspiration goes to work. | Orlando provides an abundance of unforgettable experiences from amazing year-long weather, award-winning dining, a diverse local community, elevated accommodations, shopping and world-class
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| | Betting on the patternThere are other practical headaches: replacing a failed server on the ground takes minutes, while in orbit it means launching a new satellite. And matching even a single large terrestrial data center requires thousands of satellites, raising real questions about debris in already-crowded low-Earth orbit.
Skeptics have good reasons for skepticism. SpaceX is heading toward what could be the largest IPO in history, and orbital data centers are central to its pitch to investors. The company's acquisition of xAI was framed as building a vertically
integrated stack combining rockets, satellites, and an AI company under one roof, with orbital data centers as the connective tissue. xAI was (and still is) burning through cash with no clear path to profitability, and to some analysts the deal looked less like strategy than a bailout dressed up as vision. There is real money to be made in convincing investors that space is the next frontier before the economics have actually closed.
But Musk has a habit of making things work that seemed economically irrational until they weren't. Electric vehicles
were too expensive. Rocket boosters were supposed to be single-use.
The case for orbital data centers does not rest on the technology being ready today. It rests on terrestrial constraints getting worse while launch costs keep falling. The engineering problems look solvable. The economics are closing, slowly. What nobody knows is whether the demand for AI compute stays large enough, and lasts long enough, for the math to catch up before the moment
passes.
—Jackie Snow, Contributing Editor | | Tired of boring business news?
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