SpaceX acquired xAI in February 2026, integrating its data center operations and Grok AI models into the SpaceX orbital compute framework, according to Crypto Briefing. SpaceX's acquisition of xAI in February 2026 advances the company's ambitious plan for a network of up to 1 million orbital data center satellites. SpaceX expects to launch its first orbital data center satellites in 2027, having filed an application with the FCC for this extensive network.

SpaceX envisions a network of up to 1 million orbital data center satellites. However, major tech investors like Softbank are committing $500 billion to terrestrial data centers. Major tech investors like Softbank are committing $500 billion to terrestrial data centers, creating a fundamental disagreement on the future location of AI compute power.

While orbital data centers promise a revolutionary shift, the immediate future of AI compute infrastructure will likely be dominated by massive terrestrial investments. Space-based solutions appear poised to emerge as a niche or long-term alternative.

The Terrestrial Counter-Offensive: Billions Poured into Earth-Based AI

  • Softbank is focusing on building data centers on Earth and is a main backer of OpenAI's Stargate project, committing $19 billion initially with plans to invest $500 billion over four years, according to Fortune.

The industry's deep-seated confidence in conventional, earthbound data center infrastructure for AI is evident in this colossal financial commitment. Softbank's staggering $500 billion investment suggests that despite SpaceX's xAI acquisition, orbital data centers remain a high-risk, niche pursuit. Softbank's staggering $500 billion investment prioritizes immediate scalability and proven reliability over speculative space-based solutions, indicating a clear market preference for established infrastructure.

Early Orbital Compute Trials and Partnerships

Starcloud has partnered with NVIDIA to launch a single satellite with an NVIDIA H100 GPU into orbit, according to Spiceworks. Starcloud's partnership with NVIDIA to launch a single satellite with an NVIDIA H100 GPU into orbit marks a tangible, early-stage effort to test high-end computing hardware in a space environment.