To the world’s richest man, all things eventually end in outer space.
As countries pour billions into new Earth-bound data centers in a global race for AI dominance, SpaceX CEO Elon Musk thinks the best way to conserve energy, money, and space is to put data centers in, well, space.
“In the long term, space-based AI is obviously the only way to scale,” Musk wrote in a memo announcing that SpaceX would acquire his AI company, xAI, earlier this month.
SpaceX says its goal is to launch a “constellation of a million satellites that operate as orbital data centers,” and it’s now hiring to make it happen. Each will generate about 100 kW of compute power per ton and would add 100 gigawatts of AI compute capacity annually, the company says.
Like many of Musk’s ambitious ideas, some have questioned the viability of this one. Musk, typically, is undeterred. He doubled down on the plan this week on the Dwarkesh Podcast.
“You can mark my words. In 36 months, but probably closer to 30 months, the most economically compelling place to put AI will be space,” Musk, who is famous for missing deadlines, said. “It will then get ridiculously better to be in space.”
Dwarkesh Patel, the host of the eponymous long-form tech podcast (he interviewed Musk for nearly three hours), challenged the SpaceX CEO on his plan to build data centers in space.
Patel said energy use is only about 10% to 15% of the total cost of operating a data center, so while planting data centers in space would solve the cost-of-energy problem, the cost of maintenance and servicing them would presumably erase any savings.
Musk said the plan was not about saving money on energy consumption, but about ensuring energy availability.
“If you look at electrical output outside of China, everywhere outside of China, it’s more or less flat,” Musk replied. “If you’re putting data centers anywhere except China, where are you going to get your electricity?”
The data center boom
Data centers are resource-intensive.
The largest can consume as much power as a city and up to several million gallons of water a day. Collectively, Business Insider estimated in an investigation published last year, that US data centers could soon consume more electricity than Poland, with a population of 36.6 million, used in 2023.
Business Insider’s investigation found that companies had filed permits to build 311 data centers nationwide as of 2010. By the end of 2024, that number had nearly quadrupled to 1,240.
As of 2023, about 4.4% of total US electricity consumption came from data centers, according to the Department of Energy. Globally, data centers accounted for about 1.5% of global electricity consumption in 2024, according to the International Energy Agency.
McKinsey and Company estimates that by 2030, data centers will require $6.7 trillion in investment worldwide to keep pace with demand for computing power.
The need for data centers is driving enormous spending among the big AI companies. Capital expenditures for Big Tech are expected to reach some $600 billion in 2026, with Amazon alone planning to spend $200 billion.
Musk says space is the solution
SpaceX has already started hiring for its space-based data center project.
Michael Nicolls, the vice president of Starlink Engineering, wrote in a post on X on Friday that the company is hiring for “many critical engineering roles” to develop space-bound data centers. One of them is for a “Space Lasers Engineer” based out of Redmond, Washington.
Locating data centers in space might appeal to the communities, like Northern Virginia, where electricity costs are growing and housing developments are vying with data centers for land.
For Musk, the idea is simple. “I mean, space is called ‘space’ for a reason,” he wrote in SpaceX’s memo.
SpaceX did not immediately respond to a request for comment from Business Insider.
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