SAN FRANCISCO, Feb 4, 2026, 11:17 PST
- AWS chief Matt Garman said orbiting data centers are not economical with today’s rockets and launch costs. (Investing)
- Elon Musk said “space-based AI is obviously the only way to scale,” after SpaceX combined with his AI startup xAI. (Reuters)
- Bezos-backed Blue Origin and Alphabet’s Google have also been exploring space-based computing ideas, including Google’s Project Suncatcher. (Business Today)
Amazon Web Services CEO Matt Garman said the idea of orbital data centers — server farms parked in space — is “pretty far” from practical reality. “It is just not economical,” he said, pointing to rocket limits and the cost of launching a payload, the cargo a rocket carries. (Reuters)
The comments come as the AI boom drives demand for computing power and cooling, squeezing land-based data centers and the electricity systems that feed them. That has pushed cloud firms and startups to look at alternatives, including putting hardware in orbit where some on-Earth constraints, like land and heat, could be eased. (Dawn)
Talk of moving heavy computing off-planet has sharpened this week after Musk’s SpaceX-xAI tie-up, which has revived interest in the idea of solar-powered “orbital data centers.” SpaceX has sought permission to launch up to 1 million solar-powered satellites engineered as orbital data centers, and Musk is pitching the physics — abundant sunlight — even as experts flag radiation, debris, heat, latency and simple cost as hard obstacles. “Compute in space isn’t sci-fi anymore,” said David Ariosto of space intelligence firm The Space Agency. (Dawn)
Musk said on Monday that SpaceX had acquired xAI, combining the rocket-and-satellite company with the maker of the Grok chatbot in a record-setting deal, according to Reuters. The transaction values SpaceX at $1 trillion and xAI at $250 billion, a person familiar with the matter told Reuters, and the merger consolidates Musk’s empire as SpaceX weighs an IPO. (Reuters)
SpaceX’s pitch to regulators centers on scale: a constellation of as many as 1 million satellites, linked in space and tied into its existing Starlink network, designed to run AI models. The filing describes “inference” — running an AI system after it has been trained — and other AI workloads, with satellites connected via optical links, meaning laser-based data connections between spacecraft. (Light Reading)
Even enthusiasts concede the paperwork is thin on timing. Via Satellite said the filing offers no firm schedule, and analyst Tim Farrar of TMF Associates called the orbital data-center vision a “Rorschach test” for investors weighing what, exactly, they are buying into. (Via Satellite)
Others are circling the same problem from different angles. Data Center Dynamics reported that Bezos has said data centers will ultimately end up in space over the “next couple decades,” while pointing to the heavy lift required: reusable rockets have to fly often and cheaply, or the numbers do not work. (Data Center Dynamics)
But the near-term downside case is straightforward: the rockets don’t get cheap fast enough, and the hardware problems stack up. Garman said the timeline is the key issue, noting that server racks are heavy and that “latency” — the delay in sending data back and forth — becomes a bigger concern when your computers are hundreds of miles overhead. (Constellationr)
Garman, who has led AWS since June 2024, made the remarks while appearing on the agenda at Cisco’s AI Summit alongside other tech and AI infrastructure executives. For now, he is not selling orbital data centers as the next AWS region. (Ciscoaisummit)
