Google and SpaceX Negotiate Orbital AI Data Center Deal

Google and SpaceX are negotiating a rocket-launch deal to build orbital AI data centers, according to a Wall Street Journal report. The discussions center on Google's Project Suncatcher, which aims to deploy solar-powered satellites equipped with Tensor Processing Units by early 2027 to create an orbital AI cloud. Google is also exploring deals with other launch providers, but a SpaceX partnership would follow a similar agreement between SpaceX and Anthropic to develop gigawatts of orbital AI compute capacity using the Colossus 1 facility in Memphis, Tennessee.

The talks come as multiple companies race to establish space-based computing infrastructure. Euwyn Poon founded Orbital to deploy AI inference workloads on a distributed fabric of compact satellites. Starcloud placed the first Nvidia H100 GPU in orbit in November 2025, while Axiom Space launched dedicated compute nodes in January 2026. Nvidia has developed a product line specifically for orbital data centers, and Google is testing its TPU v6 chips for radiation resistance.

Elon Musk, CEO of SpaceX, has advocated for space-based computing as cheaper to operate and free from local opposition to ground-based facilities. SpaceX, preparing for a $1.75 trillion IPO, has been pitching investors on orbital data centers as potentially cheaper than terrestrial ones. However, current launch costs of approximately $3,400 per kilogram would need to drop to around $200 per kilogram — a threshold SpaceX's Starship may eventually reach — to make orbital data centers economically viable. Engineering hurdles also persist, including the lack of airflow for cooling high-density GPUs, radiation-induced hardware degradation, and latency issues for real-time inference. Google previously invested $900 million in SpaceX in 2015.