As tech companies spend billions of dollars in AI, all that investment is creating demand for costly (and sometimes controversial) data centers. Does that mean a future in which there are giant, energy-hogging computing facilities all over the world?

Not necessarily, OpenAI’s Sam Altman last month told podcaster Theo Von. While the most likely scenario is to rely on terrestrial data centers, Altman said, “it sounds cool to try to build them in space.”

That’s what Axiom Space has in mind. The company, which sends astronauts to space and is working on a replacement for the International Space Station, is moving ahead with plans for a network of data centers in orbit.

Texas-based Axiom took an important step in that direction with the launch of a prototype to the ISS aboard SpaceX’s latest cargo mission.

The device launched over the weekend is modest in size.

It’s “basically a small box,” Jason Aspiotis, Axiom’s global director of in-space data and security, said in an interview. However, it’s “still a technological building block towards our grand scheme” for orbital data centers “in the near future.”

This is the first time Axiom has sent a computing asset of its own to the ISS, although the company teamed with Amazon in 2022 to place a Snowcone edge computer on the station.

With satellite operators like SpaceX’s Starlink and Amazon’s Kuiper generating more data – and military and other government users relying more on space, too – there’s growing demand to manage data in space, said Aspiotis.

Traditional centers are power-hungry, consume large amounts of water for cooling and generate waste heat. By contrast, orbital data centers could run on solar energy, require no water and release thermal waste into the vacuum of space.

“They move a lot of the negative impacts off the Earth’s budget,” said Malcolm Macdonald, an engineering professor at Glasgow’s University of Strathclyde.

Orbital data centers are in the beginning stages of development, and Axiom isn’t the only company thinking about how they could help with some of the world’s vast data processing needs.

Another is Starcloud, from Redmond, Washington. (It’s part of a growing cluster of space firms in the Seattle area that Bloomberg’s Matt Day wrote about last month.) Starcloud says its first commercial satellite will be fully operational next year.

There’s also Madari Space in Abu Dhabi, which aims for a first mission next year. China is working on ODCs, too. As Bloomberg’s Allen Wan wrote in the Business of Space newsletter, there’s reason to be skeptical, with astronomer Jonathan McDowell warning about the high costs of putting computing networks in orbit.

Macdonald from the University of Strathclyde is wary, too.

“Can we do it? Yes,” he said. “Can we scale up? Probably, but it will be expensive.” — Bruce Einhorn and Navya Menon

Axiom CEO on the ISS and China
While we’re on the subject of Axiom and its data center plans, watch this video of Chief Executive Officer Tejpaul Bhatia talking with Bloomberg Radio last Friday about data centers in orbit, space stations after the ISS and space competition with China.

We’re all familiar with the concept of cloud computing. But putting data centers into orbit is the “cloud above the cloud,” he said. For many people who don’t live in major metropolitan areas, Bhatia said, the location in orbit “will be the closest data center to someone at any given time.”

The idea of having data centers orbiting the Earth is catching on, he added.

“Just six months ago, people wouldn’t know what you’re talking about,” said Bhatia. Now, they no longer ask why have such ODCs. “It’s how and when?” — Bruce Einhorn

Firefly gets the OK from the FAA
Texas-based rocket maker Firefly Aerospace announced on Tuesday that the Federal Aviation Administration has given the all clear to resume launches of the company’s small-lift Alpha rocket following a mishap in April.

Firefly is now working to determine the next available launch window for the Alpha, the company said in a statement.

The FAA news lifted the stock in early trading on Wednesday morning. Firefly had soared after its recent initial public offering, reaching above $73 on Aug. 7 before ending the day around $60. However, since then the company’s shares lost altitude, closing near $45 on Tuesday.

The slide came despite the Aug. 18 announcement by Space Cotan, operator of a launch facility in Japan, of a memorandum of understanding with Firefly to study whether they can use that facility for Alpha launches. Bloomberg