AI data centres in space: what it could mean, and why it matters
Partner Phil Buckley discusses what an AI data centre in space could mean for the wider space sector, and for public services and businesses here in the UK.
Last week, SpaceX applied for licences for up to one million satellites in low Earth orbit (LEO) to support an AI data centre in space. At first glance, that does sound like a lot: at the moment there are only ~14-15 thousand active satellites in total. However, the proposal follows a clear logic.
AI compute is attracting heavy investment on Earth as well as in space. On Earth, scaling it brings well-known challenges: rising power demand, pressure on electricity grids, cooling requirements, and environmental constraints. Operating in orbit offers a different set of conditions: abundant solar energy, natural (albeit extreme) thermal management, and close integration between communications and compute. For a company with in-house launch capability, satellite manufacturing, and experience running a global constellation, extending into orbital compute is an understandable progression.
Another thing about this application I admire is the “getting ahead of the bureaucracy”. Had SpaceX applied for 10 000 satellites and later discovered they needed more, they would have had to go through the regulatory process again. This approach builds in significant headroom. For us at The PSC, the interesting question is what it means for the wider space sector, and for public services and businesses here in the UK.

What matters now
Assuming anything like this scale is realised, there will certainly be a lot more traffic in space. However, space really is vast, and even in the orbits selected there should be more than enough space for the satellites themselves.
There will be a problem with debris though. The satellites will be positioned in orbits between 500 and 2000km, and particularly between 750 km and 1,000 km the orbital space is very polluted, with millions of pieces of small, fast-moving debris (the product of decades of launches, fragmentation events and anti-satellite tests) many of which are difficult or impossible to track.
A constellation at this scale will require continuous awareness and frequent small manoeuvres. SpaceX will be confident in their own operations; but those manoeuvres will have knock-on effects for other operators, who are likely to have less fuel margin or less sophisticated tracking capability.
Operators in this environment will therefore be very happy to be getting excellent quality data as to their environment, and automated ways of testing out and then executing their manoeuvres to ensure they avoid the debris without affecting the constellation.
A compute shift – and an industrial opportunity
Life is more than getting out of the way of each other however, and one of the promises of orbital data centres is the potential for lower-cost, and potentially lower emission compute at scale.
If it proves achievable, it raises a straightforward question for UK public services: how would we design services differently if compute were materially cheaper and more available?
There are also practical engineering questions. Satellites are often designed for operational lifetimes of seven years or more, while AI hardware can evolve on a much shorter cycle. Replacing entire spacecraft to keep pace with processor development would be expensive and inefficient.
A more sustainable model could involve modular design and in-orbit servicing, allowing high-value components such as processors and memory to be upgraded while retaining longer-life systems such as power, structure and communications. The UK’s industrial strategy specifically cites in-orbit servicing and manufacturing as a strategic goal, and the UK has a strong industrial base in this area. If modular upgrade models gain traction, this could represent a meaningful opportunity.
Planning ahead
Orbital AI data centres, if realised at scale, would both increase the complexity of space operations and create new opportunities. Navigating that balance will require clear digital strategy, credible regulatory approaches, and robust space domain awareness.
If SpaceX does indeed deploy a million satellite constellation, it may not “change everything”. But it probably will change enough to matter. Space will become busier. Compute may become cheaper. Regulation will become more complex. And the countries that think clearly about those shifts early will be better placed than those that do not. These are the kinds of long-horizon infrastructure questions we spend our time working on at The PSC.
If you want to talk about space sustainability, get in touch with Phil at Phil.Buckley@thepsc.co.uk
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