Rapid growth in artificial intelligence and cloud computing is fueling an aggressive wave of data center development, but developers are increasingly constrained by local power availability, water limits, rising construction costs and pushback from nearby communities. Those pressures are prompting serious discussion of an option that once sounded purely speculative: operating data centers in space.
A recent report from JLL explores how orbital facilities might eventually complement traditional campuses on the ground by absorbing the most energy-intensive workloads, including AI training, scientific modeling and processing of satellite data. The concept remains several years from commercial deployment, yet it is being evaluated as a possible way to ease the physical and regulatory limits that now shape terrestrial development.
Andrew Batson, JLL’s global head of data center research, told Connect CRE that incremental efficiency improvements will not be enough to solve the constraints on Earth and that operators are being pushed to consider alternatives beyond conventional sites. The International Space Station already hosts CPUs and GPUs, showing that computing in orbit is viable at a small scale, but the proposals now under review envision a single facility that would exceed the size of the entire station.
Major technology platforms are already positioning around orbital computing strategies. SpaceX has requested Federal Communications Commission approval for a constellation of satellites configured as data centers. Amazon, through AWS Ground Station, is working on infrastructure to link Earth-based and orbital workloads. Microsoft, via Azure Orbital, and Google, through Project Suncatcher, are examining how cloud connectivity and AI model training could function in orbit.
Proponents see several advantages. In space, installations could draw continuous solar power and avoid dependence on grid capacity, diesel generators and prolonged local permitting timelines. The JLL report, citing aerospace startup Starcloud, notes estimates that a 40-megawatt orbital cluster could save about $138 million in energy costs over a decade versus an equivalent facility on the ground.
However, the engineering and economic barriers remain significant. Batson points to launch costs as a key threshold, stating that orbital data centers are only competitive with terrestrial options if costs can be reduced to below $500 per kilogram. Cooling is another challenge: without air, traditional systems will not work, requiring large radiators to dissipate heat into space, which in turn adds to payload size and upfront capital needs.
The way data is processed would also need to change. Satellites that monitor Earth generate vast quantities of raw information that are slow and expensive to transmit back to ground stations. Orbital data centers could instead use edge processing to analyze information on-site and send back only refined outputs for applications that can tolerate some latency.
Long-term feasibility depends on how the industry addresses hardware upgrades and orbital debris. Data center equipment could become obsolete while still technically functional, and safe decommissioning will require reliable strategies for removal and disposal.
Batson expects orbital facilities to operate alongside rather than replace traditional data centers, with ground-based campuses serving latency-sensitive uses and orbital environments handling heavy, delay-tolerant computation. For commercial real estate, the JLL report highlights potential knock-on impacts in aerospace manufacturing, logistics hubs around launch sites and supporting infrastructure, as well as more specialized areas such as space insurance and debris management.
A key near-term marker could be progress on Google’s Project Suncatcher. Batson said that if the project confirms successful AI model training in orbit, demonstrates inference performance comparable to Earth-based systems and validates cost targets by late 2027 or early 2028, it could trigger faster investment moves from AWS, Microsoft Azure and other large cloud providers. Whether orbital data centers become commonplace remains unresolved, but the debate is shifting from science fiction to a question of when economics and technology might align.
