Elon Musk and his SpaceX team believe they've cracked the code on building orbiting data centers to power the future of AI — and plan to use the company's upcoming public offering to help fund the audacious vision, according to people briefed on the plans.
Why it matters: Musk and top executives at other AI giants believe that earthbound data centers will become politically toxic and less efficient than space, which they see as the inevitable answer.
The intrigue: Sources tell us OpenAI CEO Sam Altman agrees with Musk on the physics, but knows the two men are unlikely to work together while they're battling in court.
- Altman has explored a deal with Stoke Space, a Seattle-area startup building fully reusable rockets, as a potential acquisition to build his own orbital fleet.
Altman "lights up" when he discusses space, and is prepared to spend billions to stake an off-planet claim, sources tell us.
- A Silicon Valley investor told us that space is such an essential frontier in the AI race that OpenAI has to "do something relatively quickly. Otherwise, they run a real risk of being left behind. Sam's not going to allow that to happen. ... He's thinking very long-term."
The scorecard: Google owns roughly 7% of SpaceX — an investment worth around $100 billion at the company's rumored $1.5 trillion valuation. So Google wins big if Musk is right, even as it pursues its own rival moonshot called Project Suncatcher.
- The money at stake here is hard to comprehend. The biggest data center companies are already expected to spend more than $500 billion just this year on expansion. Now add the cost of satellites and launches.
Here's how it works: Musk plans to use SpaceX's Starship — the most powerful launch vehicle ever built — to create a huge satellite constellation, much like today's Starlink constellation, as the data centers of the future.
- Today's rockets can't lift the heavy cooling systems that AI chips require. Starship can. It will carry massive next-generation Starlink satellites that function less like internet routers and more like supercomputers in the sky.
By positioning these satellites in a high orbit that stays in constant sunlight, they can harvest solar power around the clock. No night. No clouds. No electric bills.
- And instead of sending data through fiber-optic cables under the ocean, information travels between satellites via laser beams through the vacuum of space — faster and without the infrastructure.
Reality check: Cooling computers in space is brutally hard. On Earth, air carries heat away from processors. In the vacuum of space, there's no air — so chips overheat and die.
- Musk claims SpaceX has designed massive, foldable radiators that unfurl in orbit to vent heat into the cold of deep space. Skeptics call it the biggest engineering hurdle since the reusable rocket.
Between the lines: This isn't just about AI. It's about energy.
- Earth's power grids are maxed out. Data centers are already competing for electricity with factories and homes. Musk is betting the only way to scale AI without crashing the grid is to move the computing off the planet entirely.
Friction point: On Earth, upgrading a data center is easy — just replace some hardware. Skeptical technology watchers will gladly tell you the obvious: It's not so simple in space.
- Massive robotics innovations will be necessary to maintain a fleet of space data centers, unless companies want to launch all-new satellites and somehow dispose of the old ones every time there's a hardware failure or an upgrade cycle.
The bottom line: If Musk pulls this off, SpaceX won't just own transportation to space. It'll gain a huge edge on the computing power of the future.
- Go deeper: The AI future is here.
