Nvidia CEO says the economics of space data centers are 'poor right now,' but will improve
Business Insider
February 26, 2026
AI-Generated Deep Dive Summary
Nvidia CEO Jensen Huang has expressed cautious optimism about the future of orbital data centers, stating that while the economics are currently poor, they will improve over time. During Nvidia's fourth-quarter earnings call, Huang acknowledged the challenges of placing data centers in space but highlighted the potential benefits, such as abundant energy and unlimited physical space. He contrasted his view with that of OpenAI CEO Sam Altman, who has criticized Elon Musk's push for orbital data centers, calling the idea "ridiculous" given current launch costs and repair difficulties.
The concept of space-based data centers is gaining traction among tech giants, with Elon Musk's xAI and Google CEO Sundar Pichai both exploring the possibility. Musk has even predicted that orbital data centers could become a reality within 30 to 36 months, potentially offering a cheaper and more efficient solution for AI development. Meanwhile, companies like Meta, Microsoft, and Amazon are already looking into alternative energy sources, including nuclear power, due to increasing political scrutiny over terrestrial data centers.
Huang's comments reflect the broader industry shift toward innovative solutions for managing the immense energy and resource demands of modern data centers. While space-based facilities face technical and financial hurdles, they offer a unique advantage: unlimited access to solar energy and vast physical space, which could eventually make them more cost-effective than Earth-based alternatives. This potential innovation aligns with tech leaders' growing focus on reducing reliance on traditional power grids and navigating increasingly complex regulatory landscapes.
The push for orbital data centers also highlights the competitive nature of the AI and tech industries, as companies like SpaceX and Google explore new frontiers to gain a strategic edge. While some critics remain skeptical about the feasibility of space-based solutions in the near term, Huang's optimistic outlook suggests that the technology is advancing rapidly, making it a key area to watch for future business and innovation trends.
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Originally published on Business Insider on 2/26/2026