SpaceX's planned constellation of AI satellites can gain unassailable economies of scale by 2031, becoming cheaper than some current terrestrial data centers, as per fresh numbers crunched by Morgan Stanley.
According to Morgan Stanley, SpaceX's compute cost in orbit can fall down to $6.5 per watt per year by 2031 vs. $6.8 per watt per year all-in costs for NVIDIA Blackwell GPU-based terrestrial data centers
As we detailed recently, SpaceX has now unveiled its first dedicated satellite design for AI compute. Dubbed the AI1 satellite, it can support up to 150kW of peak compute payload, replete with liquid radiators, meteoride shielding, a centralized compute module, and deployable solar arrays. These satellites will be manufactured at SpaceX's Gigasat facility in Texas.
Separately, SpaceX has also asked the FCC for an authorization to launch as many as 1 million satellites as the first tangible step towards a "Kardashev II-level civilization."
Of course, operating a data center in space does come with some unparalleled benefits, including vacuum-enabled radiative cooling, continuous and uninterrupted solar energy, and planet-sized orbital slots.
Now, as per a new analysis from Morgan Stanley, SpaceX's compute cost in orbit can fall down to $6.5 per watt per year by 2031 vs. $6.8 per watt per year all-in costs for NVIDIA Blackwell GPU-based terrestrial data centers.
What's more, by 2040, these costs can fall to as low as $1.7 per watt per year, which equates to a price tag of just $1.7 billion per year for a 1GW orbital data center vs. a lump-sum cost of around $100 billion for a terrestrial one right now!
Elsewhere, the FCC has just approved a mechanism for speeding up the license approval process for new satellites under its "Delete, Delete, Delete" program. This should further aid SpaceX in navigating the red-tape around the emerging space economy.
About the author: Writing is my one incontrovertible passion. Over the past six years, he has authored over 2,200 distinct articles on financial and tech-related topics, spanning nearly 1 million words. And he has been a member of Wcctech mobile team since 2025. As an alumnus of the University of Toronto, Rotman Commerce Program, I bring nuance, in-depth knowledge, and a unique perspective to every topic that I cover. When I'm not writing, I'm traveling the world, exploring hidden confectionaries and restaurants as an aspiring food connoisseur.
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