Recently, top tech leaders have been pushing the idea of building data centers in space. Tesla’s (TSLA) Elon Musk, along with Amazon’s (AMZN) Jeff Bezos, former Google (GOOGL) CEO Eric Schmidt, and Nvidia’s (NVDA) Jensen Huang, have been supporters for some time. In addition, ai-idea-yet">Google plans to launch satellites by 2027 to test its AI chips in orbit. Meanwhile, a startup called Starcloud claimed to have trained the first large language model in space by using a satellite equipped with an Nvidia GPU.
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The renewed interest in space-based data centers is due to challenges on Earth. As AI usage grows, so does the demand for computing power, which has caused U.S. data centers to face rising electricity shortages and local resistance. In fact, a recent Morgan Stanley (MS) report warned that the U.S. could fall 20% short of data center power needs within a few years. The Department of Energy has also raised concerns about blackouts by 2030 unless new power sources are added. Meanwhile, community backlash has delayed or blocked $64 billion in data center projects.
However, space offers unique advantages. For instance, uninterrupted solar power and natural cooling could lower operational costs. At the same time, launch expenses are dropping. Indeed, SpaceX’s (PC:SPXEX) Falcon Heavy currently launches for around $1,500 per kilogram, and the company’s newer Starship rocket could bring costs down to $100/kg in the near future. Moreover, some argue that space data centers could even bypass slow permits and infrastructure limits on Earth.
Which AI Stock Is the Better Buy?
Turning to Wall Street, out of the four AI stocks mentioned above, analysts think that Nvidia stock has the most room to run. In fact, Nvidia’s average price target of $258.45 per share implies 46% upside potential. On the other hand, analysts expect the least from Tesla stock, as its average price target of $386.42 equates to a loss of 19%.
