SpaceX’s ambitious plans for orbital data centers are facing considerable skepticism. Experts are questioning both the technical feasibility and the enormous costs associated with the venture. The critical outlook significantly affects SpaceX’s stock performance, with analysts wary of the company’s projected aspirations.
- Peter Zeihan considers SpaceX’s orbital data center plans unrealistic
- Wood Mackenzie and Kalshi also express doubts on the feasibility
- SpaceX stock remains under scrutiny
Zeihan’s Physics Argument: Cooling, Radiation, and Costs
Peter Zeihan, a geopolitical analyst, has sharply criticized the proposed plans in a video on his YouTube channel. He described the initiative as “foolish on so many levels” and implied that those investing in such an idea may underestimate their financiers’ intelligence. Zeihan conducted a physical analysis of the proposal, estimating that constructing one gigawatt data center in orbit would require approximately 500 Starship launches. Furthermore, high-performance chips, according to him, would not survive exposure to space radiation without protective shielding, adding an additional burden of around 20 million pounds in weight.
Another contentious issue is the cooling mechanism. Unlike Earth, where air and water can dissipate heat, the vacuum of space presents unique challenges. To effectively cool the data center, a surface area of several dozen square kilometers would be necessary for the radiators, translating into an estimated cost of around $250 billion, according to Zeihan’s calculations.
Wall Street’s More Moderate, Yet Grim Prognosis
Wall Street’s analysts, although less harsh, still maintain a cautious viewpoint. Energy consultancy firm Wood Mackenzie projects the total cost for a gigawatt data center in orbit to be approximately $170 billion, significantly lower than Zeihan’s estimate but still triple the cost of a comparable Earth-based facility. Likewise, traders on the forecasting platform Kalshi assign low probabilities to the project. They estimate only a 14% chance that a megawatt orbital data center will be operational before January 2029, despite SpaceX citing 2028 as its target year. This likelihood rises to 39% by 2035.
SpaceX’s Stock: Grounded Business Operations
Following its acquisition of xAI in February 2026, SpaceX has positioned itself as a vertically integrated AI firm rather than merely a rocket operator. According to its IPO prospectus, the first orbital AI computing satellites are not expected to launch before 2028, aiming for a computing power ratio of over 100 kilowatts per ton and a long-term goal of 100 gigawatts of annual capacity. However, operations remain primarily terrestrial: Anthropic has been paying SpaceX $1.25 billion monthly since May 2026 for capabilities within its Earth-based Colossus data centers, with a 90-day contract termination clause available to both parties. The prospectus acknowledges significant risks, stating that orbital computing capabilities rely on unproven technologies that may never be economically viable.
The next significant milestone will be SpaceX’s self-imposed 2028 deadline for initial orbital test satellites. Until then, it remains uncertain whether Zeihan’s physical objections or the more conservative estimates from Wall Street will prove more accurate.
On a related note, SpaceX shares fell by 1.36% in NASDAQ trading on Monday, closing at $113.50, reflecting ongoing concerns regarding the feasibility of these ambitious projects.
