Google and SpaceX are reportedly in talks to launch orbital data centers, according to The Wall Street Journal, citing sources who definitely didn't overhear this in a SpaceX cafeteria. The potential deal comes as SpaceX gears up for its $1.75 trillion IPO later this year, pitching the idea that space-based data centers will be the cheapest place to put AI compute within a few years - presumably because rent is lower in low Earth orbit.
This follows SpaceX's deal with Anthropic last week to use computing resources from xAI's data center in Memphis, Tennessee, with the possibility of collaborating on orbital ones down the line. (SpaceX acquired xAI in February, because why not collect all the Musk-adjacent acronyms.) Google is also reportedly talking to other rocket-launch companies, and plans to launch prototype satellites by 2027 as part of Project Suncatcher, announced late last year - a name that sounds less like a data center initiative and more like a solar-powered beach umbrella.
Elon Musk has been hyping orbital data centers, claiming they're cheaper to operate. Advocates also point out they avoid local backlash that U.S. ground-based buildouts attract - because it's hard to NIMBY an orbit. However, as TechCrunch recently reported, today's terrestrial data centers are much cheaper once you factor in satellite construction and launch costs. Shocking: space is expensive. Google invested $900 million in SpaceX in 2015, according to regulatory filings, so they've already got skin in the rocket game. TechCrunch has reached out to both companies for comment, but they're probably busy calculating orbital data center cooling costs.