Space Data Centres: SpaceX and Blue Origin Race to Orbit While Scientists Question the Physics
April 3, 2026 – 7:30 pm
The pitch is seductive in its simplicity: AI needs more power than terrestrial grids can supply, so move the data centres into orbit, where the sun never sets and the electricity is free. SpaceX, Blue Origin, and a growing constellation of startups are now racing to make that vision real. The problem, according to the scientists and engineers who would have to make the physics work, is that the vision skips several chapters of thermodynamics, economics, and orbital mechanics that have not yet been written.
SpaceX’s Vision
SpaceX filed with the Federal Communications Commission (FCC) on 30 January for permission to launch up to one million satellites into low Earth orbit, each carrying computing hardware that would collectively form what the company described as a constellation with “unprecedented computing capacity to power advanced artificial intelligence models.” The satellites would operate at altitudes between 500 and 2,000 kilometres, in orbits designed to maximise time in sunlight, and route traffic through SpaceX’s existing Starlink network. SpaceX requested a waiver of the FCC’s standard deployment milestones, which typically require half a constellation to be operational within six years.
Blue Origin’s Approach
Seven weeks later, Blue Origin filed its own application. Project Sunrise proposes 51,600 satellites in sun-synchronous orbits between 500 and 1,800 kilometres, complemented by the previously announced TeraWave constellation of 5,408 satellites providing ultra-high-speed optical backhaul. Where SpaceX’s filing emphasised raw scale, Blue Origin’s emphasised architecture: the system would perform computation in orbit and relay results to the ground through TeraWave’s mesh network.
The Startup Buzz
The startup ecosystem is moving even faster. Starcloud, formerly Lumen Orbit, raised $170 million at a $1.1 billion valuation in March, becoming the fastest unicorn in Y Combinator history just 17 months after completing the programme. The company launched its first satellite carrying an Nvidia H100 GPU in November 2025 and filed with the FCC in February for a constellation of up to 88,000 satellites. Aethero, a defence-focused startup building space-grade computers with Nvidia Orin NX chips wrapped in radiation shielding, raised $8.4 million and is testing hardware on orbit this year.
The Commercial Rationale
The commercial logic rests on a genuine problem. Global data centre electricity consumption reached roughly 415 terawatt-hours (TWh) in 2024, and the International Energy Agency projects it could exceed 1,000 TWh by 2026, with accelerated AI servers driving 30 per cent annual growth. In Virginia alone, data centres consume 26 per cent of total electricity supply. Ireland’s share could reach 32 per cent by year’s end. The grid constraints are real, the permitting delays are real, and the political resistance to building more terrestrial capacity is real.
Scientific Concerns
What is also real, scientists argue, is the physics behind space-based data centres. Issues include:
- Thermodynamics: Heat management in crowded orbital constellations is a significant challenge.
- Economics: The cost of launching and maintaining satellites is high, and revenue models must be robust.
- Orbital Mechanics: Satellites need precise orbits to avoid collisions and maximise power generation.