China vs SpaceX in race for space AI data centers

At stake? The future of artificial intelligence, energy dominance and who controls the next layer of digital infrastructure.

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Gigawatt-class means massive energy output. Think industrial scale. These proposed orbital hubs would integrate cloud, edge and device-level computing. In simple terms, data collected on Earth could be processed in space instead of inside giant warehouses in Arizona or Inner Mongolia.

The vision goes even further. A December policy document describes an industrial-scale "Space Cloud" by 2030. The goal is deep integration of computing power, storage and transmission bandwidth, all powered by solar energy in orbit. China also signaled that space-based solar power tied to AI computing will be a core pillar of its upcoming 15th Five-Year Plan. It's all part of its national strategy.

Meanwhile, Elon Musk is making a similar bet. At the World Economic Forum in Davos, Musk said SpaceX plans to launch solar-powered AI data center satellites within two to three years. He argued that space is the "lowest-cost place to put AI" and predicted that it will be true within a few years. Why? Solar power in orbit can generate far more energy than panels on the ground. Musk said orbital solar generation can produce roughly five times more power because there are no clouds and no night cycles in the same way as on Earth. SpaceX reportedly expects to use funds from a planned $25 billion IPO to help develop these orbital AI systems.

This makes sense when you consider that AI is devouring electricity. Training and running large models requires enormous computing clusters. Power grids are straining in places like Texas and Northern Virginia. So the thinking is simple. If Earth runs short on clean energy for AI, move the servers closer to the sun.

There is only one problem. Getting hardware into space is expensive. SpaceX solved part of that with its Falcon 9 reusable rocket. Reusability dramatically lowers launch costs. It also enabled SpaceX's Starlink satellite network to dominate low Earth orbit.

China, on the other hand, has not yet completed a fully successful reusable rocket program capable of repeated, reliable flights. That is a major bottleneck. Without reusability, the cost of launching and maintaining space-based AI infrastructure remains high.

China's five-year plan also includes suborbital space tourism and the gradual development of orbital tourism. That signals a broader push to commercialize space in a way similar to civil aviation.

Meanwhile, the U.S. is racing to return astronauts to the moon for the first time since the Apollo era. The competition is heating up on multiple fronts. AI infrastructure in space is just one piece of a much larger chessboard.

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