As AI and cloud computing drive unprecedented demand for digital infrastructure, this report explores whether data centers in space could complement—not replace—terrestrial facilities. It argues that orbital data centers could leverage abundant solar power, avoid land and grid constraints, and process energy-intensive, latency-tolerant workloads such as AI training and satellite data. However, major challenges remain, including thermal management, launch costs, hardware upgrades, space debris, communications, and regulatory hurdles. Rather than replacing Earth-based infrastructure, the report envisions a future of specialized computing where orbital facilities handle asynchronous, high-power workloads while terrestrial data centers continue serving real-time applications, with key technological and economic milestones determining commercial viability.

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