Altman Pours Cold Water on Space Data Centers, Echoing Expert Skepticism

Sam Altman and Elon Musk exchanged sharp social media posts over the weekend, drawing attention to the gap between vision and reality in the space computing business. Replying to Musk accusing him of being a scammer, Altman said Musk is the one selling public market investors on short-term space data centers. Setting aside the tone, Altman is expressing what many experts have concluded but public investors seem to ignore: space data centers are not going to be a serious business anytime soon.

SpaceX's plans to launch a fleet of orbital data centers for AI inference are a key driver behind the company's $2 trillion valuation. Bullish analysts claim the potential for that computing power is unprecedented in the AI boom. However, subject-matter experts — from other space data center startups to Google's orbital compute team and engineers who have done the math — give the same answer: it won't make a significant impact until we have much cheaper rockets and the ability to mass-produce high-powered satellites at low cost.

Musk's predictable answer is Starship, SpaceX's huge new rocket. Its 13th test flight could happen as soon as July 16. If the team can make the vehicle reusable, the data center business case could close. But even with a successful recovery of both stages, operational reusable flight is likely years away, and space data center launches will take a back seat to NASA commitments and Starlink expansion.

SpaceX also conceded during its IPO roadshow that Starship may not be fully reusable in the near term, needing to discard each second stage per launch, which would undermine economical space data centers. That's why Musk's claim — "we start flying them next year" — falls flat. SpaceX could launch a satellite equipped for high-speed data processing next year, but the big question is when it can manufacture and launch them at scale. That question likely belongs to the 2030s.