SpaceX + In-flight Data Center: Is This Elon Musk's Next Grand AI Narrative?

Elon Musk's next grand narrative might be the space data center, a concept that is driving a significant increase in SpaceX's valuation.

On December 9th, in response to reports of SpaceX selling secondary market shares at a valuation of $800 billion, Morgan Stanley stated that the market is pricing in a brand - new grand narrative for AI infrastructure—"orbital data centers."

Analysts said that the underlying logic for the doubling of SpaceX's valuation lies in the expansion of its business boundaries. Elon Musk is outlining the blueprint for SpaceX's entry into the orbital data center market. Musk said directly on X that a space data center is "the fastest way to expand computing power in the next four years."

Analysts detailed the four major hard - core advantages of Musk's plan to move data centers to space, including ultimate cooling and infinite energy.

However, although SpaceX dominates the field, Morgan Stanley emphasized that this market is not a single - player game, and tech giants such as Google are also actively deploying in this area.

01 Musk Denies "SpaceX Valued at $800 Billion," There Are Subtle Differences in the Report

SpaceX is launching a secondary stock offering, selling shares on the secondary market at a valuation of up to $800 billion. This figure is not only double its $400 billion valuation in July but also would make it surpass OpenAI to become the world's most valuable private unicorn. Elon Musk later said the report was inaccurate.

Morgan Stanley said that if SpaceX were included in the S&P 500 index, a market value of $800 billion would place it 13th, between JPMorgan Chase and Oracle.

Even more striking is that SpaceX's valuation would exceed the combined market values of the top six U.S. defense contractors (RTX, Boeing, Lockheed Martin, General Dynamics, Northrop Grumman, and L3Harris).

Regarding Musk's denial of the "SpaceX valued at $800 billion" report, Morgan Stanley analyst Adam Jonas acutely pointed out in a research report that there are subtle differences in Musk's response: he seems to be mainly denying "raising new funds" because he emphasized that the company has had positive cash flow for years and is only conducting employee share buybacks.

Jonas also emphasized in the report that Musk provided reasons for the valuation increase in subsequent tweets—the progress of Starship and Starlink, as well as the significantly increased market space due to the acquisition of global direct - connect cellular spectrum.

02 The Concept of Orbital Data Centers, Musk's Next Grand Narrative

Morgan Stanley pointed out that Elon Musk is outlining the blueprint for SpaceX's entry into the orbital data center market, and the core logic is to solve the physical bottlenecks on Earth:

Power shortage: The easily accessible power resources on Earth are increasingly depleted.

Economies of scale: Musk envisions deploying a satellite constellation capable of providing an additional 100GW of AI computing power by launching one million tons of payloads annually.

Zero operating costs: These facilities will have no traditional operating or maintenance costs and will be connected to the Starlink constellation via high - bandwidth laser links.

The research report noted that in an interview with investor Ron Baron, Musk described this concept as an upcoming "convergence" of SpaceX and Tesla: using upgraded Starlink V3 satellites equipped with GPUs and high - speed laser interconnections to form a large - scale computing cloud in orbit.

Musk later said that, provided the technical obstacles are overcome, Starship is expected to achieve an annual delivery capacity of 100GW in four to five years.

Meanwhile, Morgan Stanley detailed the hard - core advantages of moving data centers to space in the research report:

Ultimate cooling (Cooling): Up to 40% of the energy consumption of ground - based data centers is used for cooling. The temperature in space is about 2.7 Kelvin (about - 270°C). Although radiative heat dissipation requires large metal radiators, industry players believe that radiating heat into deep space is much more efficient than ground - based cooling.

Infinite energy (Power): Space has an almost complete solar constant (about 1361 W/m²), which is about 30% higher than the best ground - level lighting conditions. It is not affected by atmospheric attenuation, weather, or day - night cycles and can provide reliable 24/7 energy.

Global edge connectivity: Computing resources located in low - Earth orbit (LEO) can significantly reduce the latency for globally distributed users, enabling computing resources to reach most population centers within a few milliseconds.

Scalability: According to Musk, SpaceX currently accounts for 90% of the global orbital mass launch capacity. As reusable rockets like Starship mature, the cost per kilogram to reach orbit will drop significantly, making large - scale modular deployment possible.

03 Industry Players Compete to Deploy Space Data Centers

Although SpaceX dominates the market, Morgan Stanley emphasizes that this is not a single - player field, and many companies are actively deploying in the space data center area.

The research report said that Starcloud, a startup based in Redmond, Washington, was founded in 2024 and is dedicated to deploying orbital data centers, leveraging abundant solar energy, passive radiative cooling, and space - scale infrastructure to serve AI and cloud - computing workloads.

The company has raised over $20 million in seed funding from major funds such as Y Combinator, NFX, FUSE VC, Andreessen Horowitz, and Sequoia Capital.

Axiom Space, a Houston - based commercial space infrastructure company, is developing an "Orbital Data Center" (ODC) product line and plans to launch the first two free - flying ODC nodes into low - Earth orbit by the end of 2025. These nodes are designed to provide secure cloud storage and processing services for commercial, civilian, and national security customers. The company has raised over $700 million in funds.

Tech giant Google is actively promoting a "moonshot" project called Project Suncatcher, aiming to build a solar - powered satellite constellation equipped with customized TPU hardware as a space AI/computing data center.

The company plans to launch two prototype satellites in early 2027 to test the system's feasibility and expects that by the mid - 2030s, as launch costs decrease, space computing will approach cost parity with ground - based data centers.

NVIDIA is also actively deploying in the cutting - edge of space/orbital data centers, providing high - performance GPUs and other key infrastructure.

Starcloud is a member of NVIDIA's Inception program. Earlier this month, NVIDIA and Starcloud launched a satellite carrying an H100 GPU into orbit to verify the feasibility of operating ground - level AI data center hardware in space.

This article is from the WeChat official account "Hard AI", and the author focuses on technology R & D. It is published by 36Kr with authorization.