Everyone is using generative artificial intelligence. Every industry, from film and marketing to cybersecurity and manufacturing, has quickly integrated AI into its tech stack. 

But AI’s massive power demands have sparked an energy crisis on Earth. In 2025, Southern California energy firms raised roughly $100 billion to find cheaper, sustainable ways to power the data centers that are straining the planet’s resources.

Euwyn Poon has a different solution: chuck the data center into space.

Poon, founder of downtown L.A.-based space company Orbital, announced on Tuesday that the company will deploy the first-ever space-based data center by April 2027. The space company is developing a constellation of satellites that harbor servers, all of which will be powered by solar energy.

“Small-scale orbital compute is realistic this decade, especially for defense and remote sensing workloads where latency is acceptable and data originates in orbit,” Franco Granda, a senior research analyst at PitchBook, said in an analyst note.

It’s an interesting time for the aerospace industry. Los Angeles’ aerospace hub raised $7.13 billion in 2025, a record-breaking high for the industry, according to PitchBook. The National Aeronautics and Space Administration sent its first crew in decades past low Earth orbit earlier this month, sparking a renewed interest in the existential reality of this lonely planet.

By comparison, data centers have been controversial. Communities and coalitions nationwide oppose these centers because they offer minimal economic development compared to business or housing, pose environmental risks and increase energy costs for the surrounding neighborhoods.

But that’s why Poon’s goal is to put them in space. One of the biggest bottlenecks with AI is the constraints of Earth’s physical resources, from the sprawling space required to house them to the power they consume, he said.

“I think that our demand for computing is just going to be insatiable,” Poon said. “We tend to find a way to use up all the bandwidth. Humans are very clever at that.”

The future of data centers

Orbital envisions a constellation of thousands of refrigerator-sized satellites housing servers powered by Nvidia Corp. These low-Earth-orbit units will feature massive solar panels for power – each half the size of a tennis court – and specialized radiators for cooling.

Orbital’s design addresses the many immediate problems with putting a data center in space, starting with the fact that large language models are currently powered by hundreds of graphics processing units, which are also used in computers and gaming consoles, that are so closely connected that latency is not an issue.

However, AI’s ability to perform inference, or deliver results based on the information it has processed, is easier to achieve in smaller units on satellites. Orbital and companies like it are focusing on that issue. There would still be data centers on Earth – they’d just be smaller, since some processing would occur in space.

Then, there is the issue with cooling these data centers in space. Conduction doesn’t exist in space, which is a vacuum with no air to transfer heat. That means these centers need to be equipped to transfer heat via radiation.

“Redesigning how chips are being cooled for the Orbital use case is a neat and fun engineering challenge,” Poon said. “Even big companies like Nvidia, they’re thinking of and working through architectures for supporting this use case now.”

Indeed, several companies – including Nvidia, Starcloud, Axiom Space, and SpaceX – are working to deploy data centers in space. In a filing with the Federal Communications Commission, SpaceX said it planned to deploy a space data center made up of a million satellites.

“Launching a million satellites that operate as orbital datacenters is a first step towards becoming a Kardashev II-level civilization,” SpaceX said in its filing. “One that can harness the Sun’s full power-while supporting AI-driven applications for billions of people today and ensuring humanity’s multiplanetary future amongst the stars.”