Blue Origin, SpaceX Race to Build AI Data Centers in Orbit

Elon Musk and Jeff Bezos Intensify Competition as SpaceX and Blue Origin Develop Rival Orbital AI Data Centers: Report

  • Blue Origin has spent over a year working on technology for orbital Artificial Intelligence (AI) data centers.
  • SpaceX is promoting next-generation Starlink satellites equipped for AI processing in a share sale that could value the company close to $800 billion.
  • Multiple companies, including Alphabet, are showing growing interest in space-based data centers, despite high technical and cost barriers.
  • SpaceX is reportedly preparing for a record-setting initial public offering (IPO) targeting a possible valuation of $1.5 trillion.

Blue Origin and SpaceX are advancing rival projects to push AI infrastructure into orbit. For over a year, Blue Origin has been developing technology for data centers capable of operating in space, aiming to process AI workloads off-Earth, as referenced in a recent report.

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At the same time, SpaceX is pitching a proposal to equip future Starlink satellites with onboard AI computing capacity. This plan is included in a share sale that could push SpaceX’s valuation to around $800 billion. Building and launching satellite systems that can handle AI processing faces major technical and price obstacles. According to the report, reliable operations and AI performance comparable to ground-based data centers are difficult to achieve in orbit.

Skeptics warn that technical risks may be underestimated and note that orbital data centers could have trouble competing on cost, especially if terrestrial solutions become cheaper or more energy efficient.

SpaceX is also reportedly planning a public share offering that could raise over $30 billion, with a targeted company valuation of $1.5 trillion and a potential IPO window between mid-2026 and 2027. This would make it one of the largest IPOs ever, potentially surpassing Saudi Aramco’s record debut.

Industry leaders are becoming more involved in space-based computing. Alphabet CEO Sundar Pichai said that Google plans to test small AI racks in orbit by 2027 as part of efforts to use solar energy in computing. Investor Gavin Baker highlighted the naturally cold environment of space and proposed that laser-linked satellites could help reduce costs. Elon Musk has outlined on X that localized AI data centers aboard satellites may soon allow rapid, low-latency AI results from orbit.

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Other projects, such as Google’s Project Suncatcher, are preparing to launch solar-powered satellite constellations equipped with custom AI hardware. Companies like Starcloud and Axiom Space have announced timelines to deploy AI-capable satellites and orbital data-center nodes between 2025 and 2026.

Retail investors on Stocktwits reportedly show a bullish sentiment toward SpaceX, but a bearish stance on Alphabet. Currently, SpaceX is not publicly listed, while Alphabet shares have climbed 67% this year.

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