SpaceX has filed for an initial public offering (IPO) that Elon Musk said will “bankroll” an effort to turn the company into an AI powerhouse. Part of these plans would involve launching up to one million data centre satellites into orbit to bypass power and water limits on Earth, he said.
The news comes in the wake of other companies having ambitions to escape land-based data centres. Microsoft previously sought to have a data centre underwater off the coast of Scotland, aiming to reduce energy use through seawater cooling – although the project was abandoned due to lack of client demand, Reuters said.
Hitachi, Hitachi Systems, and MOL also inked a deal this week to develop ideas for floating data centres to determine whether they could be the next sustainable, compact solution for the industry.
As reported by Reuters, SpaceX could raise up to US$75 billion when it goes public, which could make it the largest IPO in history. SpaceX acquired Musk’s startup xAI in February, which includes X (formerly Twitter) and AI chatbot Grok.
Space data centres are not a new idea, but have become a more popular concept in recent months. With AI demand booming, data centres are expected to consume roughly 3% of the world’s electricity by 2030, demanding 945 terawatt-hours (TWh) annually – which has led to industry leaders considering space data centres as a more energy-efficient alternative.
Blue Origin, a company run by Jeff Bezos, is currently backing orbital data centres – with its Project Sunrise concept working to add AI computing capacity in orbit by using solar power.
Musk has reportedly said he will overcome technical and financial hurdles, including radiation exposure, heat management in a vacuum and the need for frequent hardware replacement, by developing more resilient AI chips.
However, within the big tech world, the belief is the economics of space-based data centres are not suitable. In other words, they will be very expensive – with Musk’s plans potentially reaching trillions of dollars.
Reuters analysts argued that, in order for data centres in space to be commercially viable, launch costs would need to fall from thousands of dollars per kilogram to low hundreds of dollars per kilogram.
“We should definitely work on the ground first because we’re already here,” Nvidia CEO Jensen Huang said, speaking on the All-In podcast in February. He described orbital AI infrastructure as a longer‑term engineering challenge rather than a near‑term solution.
Related stories
SpaceX lines up banks for what could be a record breaking IPO
OpenAI overtakes SpaceX to become world’s most valuable startup at $500bn
