Google and SpaceX reportedly discuss orbital data centers

Google and SpaceX are in talks to launch orbital data centers, according to a report by The Wall Street Journal citing sources familiar with the matter. The early-stage discussions represent a potential shift in how technology companies deploy infrastructure for artificial intelligence. Google is reportedly talking to other rocket-launch companies as well, indicating a broader interest in space-based computing.

The potential partnership aligns with SpaceX’s preparations for a $1.75 trillion IPO later this year. As the aerospace company gears up for the public offering, it is selling investors on the idea that data centers in space will be the cheapest place to put AI compute within the next few years. This pitch follows a deal last week where Anthropic agreed to use computing resources from xAI’s data center in Memphis, Tennessee. SpaceX acquired xAI, an artificial intelligence company, in February. The agreement reportedly includes the potential for the companies to work together on orbital data centers in the future.

Google has its own history in space technology and plans to launch prototype satellites by 2027 under an initiative called Project Suncatcher, which it announced late last year. Google also has a long-standing financial relationship with SpaceX, having invested $900 million in the aerospace company in 2015, according to regulatory filings.

Proponents of orbital data centers, including Elon Musk, claim they are cheaper to operate. Advocates also point out that space-based facilities are free from the local backlash that ground-based buildouts attract in the U.S. However, the economic viability of space-based computing remains highly contested. As TechCrunch recently reported, today’s terrestrial data centers are much cheaper than those in orbit once satellite construction and launch costs are factored in. While orbital infrastructure avoids local backlash, the costs of satellite construction and launch currently outweigh the operational savings of operating in orbit.

Why it matters

This partnership highlights the extreme lengths tech giants are considering to secure AI compute capacity, even as the economics of space-based infrastructure remain unproven compared to terrestrial alternatives.