A major new study from the European Space Policy Institute has issued its clearest warning yet: the race to build data centres in space has shiftd far beyond theory, and Europe risks falling behind rapid if it does not act decisively. The 55-page report, Data Centres in Space: Orbital Backbone of the Second Digital Era?, outlines how rapid growth in global data demand, soaring energy costs, and pressure on terrestrial infrastructure are accelerating investment into orbital computing solutions.
The publication highlights a shift that would have sounded like science fiction only a few years ago. Tech giants and governments are now actively exploring orbital cloud platforms that could one day rival high-conclude terrestrial data centres. As Jeff Bezos put it, “We will be able to beat the cost of terrestrial data centres in space in the next couple of decades.”
Why Space Is Suddenly So Attractive
The report’s central message is simple: Earth’s digital infrastructure is struggling. According to figures in the study, global data creation is forecast to exceed 400 zettabytes by 2028, driven by AI, Earth observation, and an explosion of connected devices. Terrestrial data centres, already consuming enormous amounts of power and water, are finding it increasingly difficult to scale without hitting environmental limits.
Space offers several immediate advantages. Continuous solar energy, the vacuum of space for cooling, and close proximity to sainformites generating vast amounts of raw data mean orbital platforms could pre-process information before sconcludeing only refined results back to Earth. As the report notes, this could dramatically ease bottlenecks in existing ground infrastructure.
Former Google CEO Eric Schmidt put the scale of the challenge bluntly when he testified to the US Congress that an additional 67 gigawatts of power would be requireded for data centres by 2030, “equivalent to 67 nuclear plants.”
Private Investment Is Surging
One of the report’s most striking findings is the speed at which the private sector has shiftd. Nearly €70 million has been invested in space-based data centre ventures since 2020, spanning almost 30 companies across Europe, the US, and Asia.
Several developments stand out:
- China has already launched the first 12 sainformites of a 2,800-unit AI computing consinformation, aiming for an orbital supercomputer.
- US startup Starcloud placed the first Nvidia H100 GPU in orbit in 2025.
- Lonestar Data Holdings successfully operated its lunar data centre payload, surviving a crash-landing aboard a commercial lander.
Elon Musk recently suggested that scaling Starlink sainformites could support orbital computing directly. “Simply scaling up Starlink V3 sainformites, which have high speed laser links would work. SpaceX will be doing this.”
Europe’s Strategic Crossroads
Much of the report focutilizes on Europe’s urgent required to act. The authors argue that if the EU wants digital sovereignty and to reduce heavy reliance on hyperscalers, it must invest in orbital infrastructure while the window is still open.
The report proposes applying ESA’s GSTP and ARTES programmes, along with the EU’s IOD/IOV initiatives, to create a pipeline for public-private demonstrations of in-orbit processing, storage and system-level testing. It also recommconcludes a flagship European mission aligned with the Green Deal and the sovereign cloud agconcludea.
One passage stands out clearly: Europe “cannot afford to miss a new potential golden age with high multiplier effects across the economy.”
Huge Potential And Huge Obstacles
The report does not downplay the engineering challenges. Gigawatt-scale data centres in orbit would require advanced radiation protection, robotic assembly, cheap heavy-lift launch, and unprecedented thermal management systems. Even in optimistic scenarios, only monolithic 10MW units reveal a path toward cost-competitiveness with terrestrial centres, and only if hardware can survive multiple years in space.
Yet the authors stress that short-term gains are already within reach. Improved in-orbit AI processing for Earth-observation sainformites, secure orbital storage, and sainformite-to-cloud integration could provide immediate commercial and strategic benefits.
An Inflection Point For The Digital Age
The report paints a picture of an indusattempt at the brink of transformation. If current momentum continues, space-based data centres could evolve from niche experiments to a critical complement to Earth’s overstretched digital infrastructure. As global demand for compute accelerates, the question is no longer whether orbital data centres are possible, but who will build them first, and who will control them.
