When former McKinsey consultant Philip Johnston introduced the mission of his startup Starcloud — enabling a transition from terrestrial data centers to building them in space — at a World Economic Forum Innovators dinner in Tianjin, China last June, it seemed like science fiction.
Since then, the quest to build data centers in orbit has launched a new space race. Driven by an AI-induced explosion in computing demand, soaring terrestrial energy costs, and rapidly falling launch prices, major technology companies and a growing ecosystem of startups have revealed plans to move compute infrastructure off Earth.
Starcloud launched its first spacecraft with an Nvidia H100 chip on board just a few months after the June dinner, in November 2025. The company, which is backed by Nvidia and has raised $200 million in total, reaching unicorn status in just 17 months, has already demonstrated the ability to run a version of Google’s Gemini AI from space. It plans to launch a second spacecraft in October of this year.
Meanwhile, Elon Musk has recast much of SpaceX’s future around operating AI data centers in space. Jeff Bezos’ Blue Origin envisions building a major business doing the same, while Alphabet’s Google and Planet Labs are working on a mission to test how satellites would run AI computing systems.
According to industry analyst BIS Research, the space-based data center market is projected to reach $39 billion by 2035, although major technical hurdles — including thermal management, radiation hardening, latency, and orbital congestion — remain.
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