Computing Beyond Earth's Borders
The idea of placing data centers in orbit once belonged firmly to the realm of science fiction. In the span of a single month, it has become a serious commercial proposition. Six American companies and a Chinese firm have publicly expressed interest in building orbital data centers — facilities that would process data in space rather than in the terrestrial server farms that currently power the world's digital infrastructure. The motivations are as practical as they are ambitious: virtually unlimited cooling via the vacuum of space, access to uninterrupted solar power, and freedom from the land, water, and energy constraints that are increasingly limiting data center expansion on Earth.
But this rush to orbit is happening far faster than the regulatory frameworks needed to govern it. Experts across legal, technological, and policy domains are raising alarms that critical computing infrastructure could soon operate in a jurisdictional gray zone, potentially beyond the effective reach of any single nation's laws. For developing countries in particular, the implications could be profound.
Why Space Makes Sense for AI
The convergence of several trends is making orbital data centers increasingly attractive. Artificial intelligence workloads have exploded in scale, with training runs for frontier models consuming hundreds of megawatts of power and generating enormous amounts of waste heat. On Earth, data center operators face growing competition for electricity, water for cooling systems, and land in locations with suitable infrastructure. Some regions are already hitting capacity constraints that limit new data center construction.
Space offers elegant solutions to several of these challenges. In orbit, the vacuum provides natural thermal management — heat can be radiated directly into space without the massive cooling systems that consume a significant percentage of terrestrial data center energy. Solar panels can generate continuous power without the intermittency issues that affect ground-based renewable installations. And there is no competition for land, water, or grid capacity.
The declining cost of launch services, driven by companies like SpaceX and its reusable rocket technology, has made the economics of orbital infrastructure far more feasible than even a few years ago. What was once prohibitively expensive is now merely very expensive — a cost calculus that is crossing viability thresholds for some of the highest-value computing workloads.
The Regulatory Void
The fundamental challenge with orbital data centers is jurisdiction. The Outer Space Treaty of 1967, the primary international framework governing activities in space, was written for an era of government-led space programs focused on scientific exploration and military surveillance. It was not designed to address commercial computing infrastructure that processes data for global customers across every industry.
Under current space law, activities in orbit fall under the jurisdiction of the launching state, but enforcement mechanisms are limited and the applicability of terrestrial regulations — including data privacy laws, surveillance restrictions, and content moderation requirements — is untested. A data center in low Earth orbit operated by a company from one country, serving customers in dozens of others, and physically present in no country's sovereign territory, creates a novel and potentially ungovernable situation.
For nations with strong data sovereignty laws — requirements that citizen data be stored and processed within national borders — orbital data centers could represent an existential regulatory challenge. If computing moves to space, the very concept of data residency becomes ambiguous. Where, legally, is data that is processed in orbit?
Implications for the Developing World
Experts warn that the move toward orbital computing could deepen existing digital dependencies for much of the developing world. Countries that lack their own launch capabilities, satellite infrastructure, and space industry expertise would become even more reliant on a small number of technology companies headquartered in the United States and China for their critical digital infrastructure.
This dependency carries risks beyond economics. Access to computing resources could become a geopolitical lever, with orbital data center operators able to restrict service to specific countries or regions based on political relationships rather than technical capacity. The concentration of critical infrastructure in the hands of a few operators, operating beyond effective national regulation, raises sovereignty concerns that many governments are only beginning to contemplate.
The Chinese Dimension
The involvement of a Chinese firm in the orbital data center push adds a geopolitical layer to an already complex situation. US-China competition in space has been intensifying across multiple fronts, from lunar exploration to satellite constellations. Adding commercial computing infrastructure to this competition raises stakes on both sides, as orbital data centers could provide strategic advantages in AI development, intelligence processing, and secure communications that blur the line between commercial and military applications.
What Happens Next
The technology required to build and operate data centers in orbit remains under development, and significant engineering challenges remain around power systems, thermal management at scale, data transmission bandwidth, and hardware maintenance and replacement. No orbital data center is expected to become operational in the near term.
But the pace of interest and investment suggests that the industry is moving faster than regulators anticipated. International bodies, including the United Nations Committee on the Peaceful Uses of Outer Space, will likely face pressure to develop new frameworks that address commercial computing in orbit. Whether governance can keep pace with technology — a question that has defined the digital age on Earth — is about to be tested in an entirely new domain.
This article is based on reporting by Rest of World. Read the original article.
