• SpaceX and Google (GOOGL) are in discussions to develop data centers in orbit, as reported by the Wall Street Journal.
  • Hitachi and X LABS have announced a collaboration to deploy large-scale energy parks for AI data centers in North America, targeting the early 2030s.
  • These developments highlight the growing intersection of space infrastructure and AI compute demand, with financing models leveraging Energy as a Service (EaaS).

SpaceX and Google Eye the Final Frontier

SpaceX and Google are in advanced talks to explore orbital data centers, according to people familiar with the matter. The initiative, which could revolutionize AI compute by moving processing power off-planet, is still in early stages but signals a major strategic shift for both companies. Google’s Project Suncatcher, a concept for orbit-based AI compute, has already seen prototype demonstrations, while SpaceX’s Starlink constellation provides the backbone for satellite connectivity.

“This is about scaling AI without terrestrial constraints,” a person close to the discussions said. Talks are ongoing, and no final agreement has been reached. SpaceX did not respond to requests for comment; Google declined to comment.

The partnership would leverage SpaceX’s launch capabilities and Google’s AI expertise, potentially reducing energy and cooling costs associated with ground-based data centers. However, challenges remain, including latency, radiation, and regulatory approvals.

Hitachi and X LABS Power the Ground Game

Separately, Hitachi and X LABS announced a collaboration to build large-scale energy parks specifically designed to power AI data centers. The first deployments are expected in North America by the early 2030s, utilizing Hitachi’s grid technology and X LABS’ project financing via special purpose vehicles (SPVs).

“We’re moving to an energy-as-a-service model to meet the insatiable power demands of AI,” a Hitachi executive said. The energy parks will integrate renewable sources and storage, offering a stable power supply for hyperscale data centers. The move reflects a broader trend where tech giants and energy firms partner to address the surge in AI-driven electricity consumption.

Analysts note that while orbital data centers are a long-term play, terrestrial solutions like the Hitachi-X LABS venture are immediate priorities. “The economics of space compute are still unproven, but ground-based infrastructure is critical now,” said an industry analyst.

Correction: An earlier version of this article misstated the timeline for Hitachi-X LABS deployments; they are targeted for early 2030s, not 2027.