Peter Griffin: We should all hope Elon Musk’s wacky plan for data centres in space works

Peter Griffin

Technology writer·New Zealand Listener·

25 Feb, 2026 05:00 PM3 mins to read

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Elon Musk’s SpaceX plans to launch orbital data centres powered by sunlight and linked back to Earth via Starlink’s satellite network. Photos / Getty Images. Illustration / NZ Listener

It was only a matter of time before Elon Musk pointed one of his rockets at the cloud. The billionaire who launched a Tesla roadster into orbit and blanketed the planet in Starlink broadband coverage now wants to put data centres in space.

It’s classic Musk – grandiose, technically challenging,
quite possibly ketamine-fuelled. He’s betting big that running artificial intelligence tasks in space will pay off handsomely for his soon-to-be-merged companies xAI and SpaceX.

Even if you loathe the man, you should be quietly cheering him on. If AI continues to grow the way it has over the past two years, we will increasingly see tech giants competing with communities for electricity. AI data centres are turning out to be gluttons. Every prompt you type into ChatGPT, every image conjured by Midjourney, every bad song you ask Suno to create – all flow through banks of graphics-processing units (GPUs) that slurp electricity and water like digital vampires.

The International Energy Agency estimates global data centre power consumption could account for 3-4.4% of global electricity by 2030. That sounds modest, but data centre energy use is growing four times faster than average power use.

This is happening at a time when we need more electricity for vehicles, and factories are moving away from fossil fuels.

New Zealand is on the cusp of its own data-centre boom, thanks to hyperscalers like AWS (Amazon Web Services) and Microsoft. The companies love our hydro power, fresh air and low geopolitical risk. When the choice comes down to powering an AI model or heating New Zealand homes, the market will prioritise those willing to pay the most.

This is where Musk’s latest idea has merit. SpaceX plans to launch orbital data centres powered by sunlight and linked back to Earth via Starlink’s satellite network. Musk can tap into free solar energy, unlimited cooling via the frigid darkness of space, with no Nimbys complaining about server farms.

In theory, it could be the ultimate clean-energy solution. Space-based solar panels generate consistent power without clouds or nightfall cutting production. Waste heat can be radiated into the void. And latency, the bane of internet engineers, could be surprisingly low thanks to Starlink’s growing constellation of low Earth orbit satellites.

But as with most Musk ventures, between the spark of inspiration and reality lies a canyon of engineering, costs and bureaucracy.

First, there’s the economics. Lifting even one data centre’s worth of hardware will be expensive. SpaceX has reusable rockets, but launch costs are measured in tens of millions, which is why Musk told xAI staff he plans to build a giant slingshot to send data centre satellites into space – yes, you read that right. Then there’s maintenance. You can’t exactly send an IT guy up in a Falcon 9 every time a cooling pump fails or a cosmic ray fries a GPU.

Heat dissipation is tricky in space, which is a vacuum. You can’t just pipe out hot air – you need massive radiators to bleed energy away as infrared light. Radiation shielding and orbital debris add to the challenge.

Then there’s the question of regulation. Data sovereignty laws don’t deal with the scenario where your personal data or government records are in orbit. Who has jurisdiction if a data centre explodes or is hacked by a malicious satellite?

Still, Musk turned the electric car industry on its head and built the world’s largest satellite internet network. His space data centre plan sounds insane. But compared with the alternative, an AI-powered world straining every power line and hydrodam we’ve got, it makes sense.

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