Politically toxic and…: Why space has become an essential frontier in the AI race for Elon Musk and other tech CEOs

Elon Musk thinks he's solved one of AI's biggest problems: where to put all those power-hungry data centers. According to an Axios report citing people briefed on the plans, SpaceX believes it has cracked the code on building orbiting data centers, and plans to use its upcoming $30+ billion IPO to fund the vision.The logic is straightforward. Earth's power grids are struggling, and data centers—especially the massive facilities training AI models—are becoming what Musk and other executives call "politically toxic" as they drain electricity from homes and factories. So why not move computing off the planet entirely?

Space isn't Musk's dream alone; Sam Altman, Sundar Pichai, and Jeff Bezos all want to go to space.

Musk isn't dreaming alone. OpenAI's Sam Altman has explored acquiring rocket startups to build his own orbital fleet. Google launched Project Suncatcher, aiming to send its custom AI chip to space by 2027.

Jeff Bezos predicts space data centers within 10 to 20 years. Even Salesforce CEO Marc Benioff is excited, calling space "the lowest cost place for data centers."Space offers tantalizing advantages. Satellites in high orbits can access sunlight 24/7, harvesting solar power without nighttime gaps or cloudy days. SpaceX plans to launch massive next-generation Starlink satellites using its Starship rocket, the only vehicle powerful enough to carry the heavy cooling systems AI chips demand.

Data would zip between satellites via laser beams through the vacuum of space—no undersea cables required.

Cooling AI chips in space remains the biggest engineering challenge

Reality, however, is unforgiving. Cooling computers in space is extraordinarily difficult because there's no air to carry heat away from processors. Musk claims SpaceX has designed massive foldable radiators that unfurl in orbit to vent heat into deep space, but skeptics remain unconvinced.Then there's maintenance. On Earth, upgrading a data center means swapping out hardware.

In space, you'd need advanced robotics or fresh satellite launches every time something breaks. The solar panels alone would be staggering—one proposed 5-gigawatt facility would need panels stretching 2.5 miles wide.SpaceX is targeting a $1.5 trillion valuation with revenues hitting $24 billion in 2026, mostly from Starlink. Google owns roughly 7% of the company, meaning it wins either way. If Musk pulls this off, SpaceX won't just own transportation to space—it'll control the computing power driving AI's future.