On March 21, 2026, Elon Musk, founder of SpaceX, suggested that the future of data centers could be in space, citing the availability of nearly limitless solar energy. This idea comes as data centers, which power the internet and artificial intelligence, are expected to consume nearly double the electricity they do today—rising from 485 terawatt-hours (TWh) in 2025 to 950 TWh by 2030, according to the International Energy Agency. To address this growing demand, SpaceX unveiled a prototype satellite, called AI-1, on June 8, 2026. Designed to perform computing tasks for AI, the AI-1 satellite features high-efficiency solar panels and is expected to generate 175 kW of average computing power. It will be manufactured starting in 2027 at SpaceX facilities in the U.S., with the possibility of future production on the Moon. The satellite is equipped with laser-based communication systems, similar to those used in SpaceX's Starlink network, to transmit data between satellites and to Earth. SpaceX is not alone in exploring the concept of orbital data centers. Companies in the U.S., France, and the United Arab Emirates, along with China, are also developing similar projects. Starcloud, a U.S. company, has already made progress by launching a satellite in November 2025 that successfully trained an open-source AI model called NanoGPT in orbit. This satellite also runs another AI model called Gemma, developed by Google Deepmind. However, experts caution that sending large amounts of data from Earth to space and back may be impractical due to limited bandwidth. In the long run, orbital data centers may focus on processing data created in space, rather than transmitting large volumes from Earth. One major challenge for orbital data centers is managing heat. In space, microprocessors can be exposed to extreme temperatures, with some parts reaching up to 150 degrees Celsius. To address this, radiators with a total surface area of 160 square meters will be used to dissipate heat. These radiators must be carefully oriented to avoid overheating and shielded from micrometeorites. Another issue is cosmic radiation, which can damage electronic components. Solutions such as radiation shielding and error-correcting codes are being developed, but they may increase energy use and hardware complexity. NASA and companies like Microchip Technology are working on radiation-resistant processors, while Nvidia has introduced a module designed for space use. Despite technological progress, orbital data centers face other challenges, including maintenance and legal complexities. Unlike terrestrial data centers, which can be repaired or upgraded regularly, satellites in orbit cannot be easily serviced. After a few years, they may need to be decommissioned through atmospheric re-entry or moved to a "graveyard orbit." Legal issues also arise, as space laws are still evolving. For example, if an orbital data center causes damage on Earth, the country where it was launched may be held responsible. Additionally, the cost of launching and maintaining such large satellite constellations remains a concern. SpaceX's plan for a million satellites, for instance, would be extremely expensive if current launch costs remain high. While some are looking to space for data center solutions, others are exploring the ocean. In May 2026, the startup Panthalassa raised $140 million to develop floating data centers that use wave energy for power and cooling. These structures, designed to be deployed in the Pacific Ocean, could offer an alternative to both terrestrial and orbital data centers by combining renewable energy with efficient cooling systems. As the demand for computing power continues to grow, the race is on to find the most viable and sustainable solutions—whether in space, on the ocean, or on Earth.