Google’s parent company Alphabet (GOOGL) is reportedly in talks with Elon Musk’s privately-held SpaceX about placing artificial intelligence (A.I.) data centers in Earth’s orbit.
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The Wall Street Journal is reporting that the two companies are discussing a rocket launch deal as Alphabet looks to put data centers into outer space. However, according to the report, SpaceX is just one of several rocket-launch companies that Alphabet is in active discussions with about a potential collaboration.
Last autumn, Alphabet said that it was researching space-based data centers under an internal program at the company called “Project Suncatcher.” That program aims to launch two prototype satellites into Earth’s orbit by early 2027.
The New AI Space Race
Alphabet and SpaceX are one of several technology companies that are looking to place AI data centers into outer space. Given how energy intensive data centers are, many tech firms believe that placing data centers into orbit and powering them from the sun will be more economical and better for Earth’s environment.
Last week, AI start-up company Anthropic agreed to use the full computing power of SpaceX’s Colossus 1 facility in Memphis, Tennessee and expressed interest in working with the rocket company to develop space-based orbital data centers.
Is GOOGL Stock a Buy?
The stock of Alphabet has a consensus Strong Buy rating among 33 Wall Street analysts. That rating is based on 28 Buy and five Hold recommendations issued in the last three months. The average GOOGL price target of $426.44 implies 11% upside from current levels.
