（Singapore, 29.08.2025） The next frontier for cloud computing might not be in a sprawling warehouse on Earth but in the final frontier itself: space.
As tech giants pour billions into artificial intelligence, they’re creating a voracious demand for data centers, and a new wave of startups is proposing a radical solution. Instead of building more energy-hungry facilities on the ground, these companies want to launch data centers into orbit, a concept some are calling the “cloud above the cloud.”
The idea, once the stuff of science fiction, is rapidly gaining traction. OpenAI CEO Sam Altman, a key figure in the AI boom, recently acknowledged the appeal of building data centers in space. While he admits the most likely scenario is still a reliance on terrestrial facilities, he can’t help but find the orbital alternative “cool.”
Axiom Leads the Charge with a “Technological Building Block”
Leading the charge is Axiom Space, a Texas-based company best known for flying astronauts and developing a successor to the International Space Station (ISS). They’ve taken a tangible step toward their vision of an orbiting network of data centers. A prototype device, described as “basically a small box,” was recently launched to the ISS aboard a SpaceX cargo mission.
This isn’t Axiom’s first foray into orbital computing, but it is their first time sending their own equipment. In 2022, they collaborated with Amazon to place a small computer on the station. According to Jason Aspiotis, Axiom’s global director of in-space data and security, the new prototype is a “technological building block towards our grand scheme” for the near future.
The growing demand for space-based data processing is being driven by several factors. Satellite operators like SpaceX’s Starlink and Amazon’s Kuiper are generating ever-increasing amounts of data. Additionally, military and government agencies are becoming more reliant on space-based assets, creating a need to manage and analyze data closer to its source.
A Solution to Earth’s Data Center Woes?
The environmental and logistical benefits of orbital data centers are a major selling point. Traditional data centers are notorious for their massive power consumption and reliance on vast amounts of water for cooling. They also release significant waste heat.
In contrast, data centers in space could operate with minimal environmental impact. They would be powered by clean, abundant solar energy, require no water for cooling, and release thermal waste directly into the vacuum of space. As Malcolm Macdonald, an engineering professor at Glasgow’s University of Strathclyde, puts it, they “move a lot of the negative impacts off the Earth’s budget.”
A New Space Race for the Cloud
Axiom isn’t the only player in this nascent field. The idea of orbital data centers is catching on with other startups, signaling a potential new space race.
Starcloud, based in Redmond, Washington, plans to have its first commercial satellite fully operational next year. The company is part of a burgeoning cluster of space firms in the Seattle area, a hub for innovation.
Madari Space in Abu Dhabi is also working toward a first mission next year.
And not to be outdone, China is also reportedly developing its own orbital data centers.
While the potential is exciting, experts are urging caution. The high costs associated with launching and maintaining computing networks in orbit are a significant hurdle. Astronomer Jonathan McDowell has voiced skepticism, and Professor Macdonald, while confident the technology is possible, is wary of the scalability. “Can we do it? Yes,” he said. “Can we scale up? Probably, but it will be expensive.”
The Vision of the “Cloud Above the Cloud”
In an interview with Bloomberg Radio, Axiom CEO Tejpaul Bhatia painted a picture of a future where orbital data centers are not just a technological feat but a practical necessity. He describes the concept as the “cloud above the cloud,” a network that, for many people, could be the closest data center to them at any given time.
Bhatia notes a shift in the conversation. Just six months ago, people were asking why anyone would want to put data centers in space. Now, the questions have changed to how and when. This evolution in perspective suggests that the once-unthinkable idea of computing in orbit is on its way to becoming reality.
Beyond the Cloud: What Else Is Happening in Space?
In addition to the rise of orbital data centers, other significant developments are shaping the broader space industry. Firefly Aerospace, a Texas-based rocket maker, recently received a crucial green light from the Federal Aviation Administration (FAA), allowing it to resume launches of its small-lift Alpha rocket. The news was a boost for the company, as its stock had seen a recent dip following a launch mishap in April. Further demonstrating its growing international reach, Firefly also signed a memorandum of understanding with Space Cotan, a Japanese launch facility operator, to explore the possibility of using the Japanese site for future Alpha launches.
Meanwhile, space innovation is taking off around the globe. In India, Prime Minister Narendra Modi has set an ambitious target of 50 rocket launches per year. On the technological front, NASA and IBM have unveiled a new AI tool designed to help forecast solar storms, while Space42, a company based in the UAE, is planning a fundraiser to support an African mapping project.
As startups and established companies continue to look to the stars, the race to innovate is only just beginning. From orbital data centers to AI-powered solar storm forecasts, the cosmos is rapidly becoming the next arena for technological advancement.
