Elon Musk’s vision for one million orbiting AI data centers is facing a growing wall of skepticism, with analyst firm Gartner calling the concept “peak insanity,” OpenAI CEO Sam Altman dismissing it as “ridiculous,” and short seller Jim Chanos labeling it “AI Snake Oil” — all within the past week. The criticism comes as a public comment period on SpaceX’s filing with the Federal Communications Commission closes on March 6, and as scientists warn that greenhouse gas emissions could halve the safe capacity of low-Earth orbit by century’s end.
SpaceX filed its application with the FCC on January 30 to deploy up to one million solar-powered satellites operating as orbital data centers between 500 and 2,000 kilometers in altitude. The filing describes the constellation as “a first step towards becoming a Kardashev II-level civilization — one that can harness the Sun’s full power”. The FCC’s Space Bureau accepted the application for review just five days later — an unusually fast turnaround — and opened it for public comment.
A Chorus of Critics
The backlash has intensified in recent days. A Gartner report published this week concluded that “datacenters in space won’t analyze data on Earth for Earth applications for decades, if ever,” with analyst Bill Ray warning that companies are “wasting money by pouring funds into the orbital data center ‘bubble'”. Nvidia CEO Jensen Huang, speaking during the chipmaker’s fourth-quarter earnings call on February 25, acknowledged that “the economics are poor today” for orbital data centers, noting that the absence of airflow in space means “the only way to dissipate heat is through conduction” using “fairly large” radiators.
OpenAI’s Altman was blunter. “I honestly think the idea with the current landscape of putting data centers in space is ridiculous,” he said at a press conference hosted by The Indian Express in New Delhi. “Orbital data centers are not something that’s going to matter at scale this decade”. Short seller Jim Chanos has repeatedly called the plan “AI Snake Oil from the Silicon Valley promoter class,” noting that electricity costs represent only about 5–7% of AI data center revenues and that “literally every cost other than power will be higher in space”.
The Strategic Logic
The filing came just days before SpaceX completed its acquisition of Musk’s AI startup xAI on February 2 in a deal valuing the combined entity at $1.25 trillion — the largest merger in history, according to CNBC. Musk described the merger as creating “the most ambitious, vertically-integrated innovation engine on (and off) Earth” and predicted orbital data centers would become more economical than terrestrial ones “within two to three years”. Deutsche Bank estimates the timeline is more likely the 2030s.
The proposal arrives against a backdrop of mounting community opposition to ground-based data center construction across the United States. An Associated Press investigation found that an increasing number of projects are being voted down by local communities concerned about power consumption, water usage, and strain on electrical grids. Amazon founder Jeff Bezos and Google CEO Sundar Pichai have separately endorsed the broader concept of space-based data centers, with Bezos predicting they could arrive within 10 to 20 years and Pichai planning to send test hardware to orbit by 2027
Orbital Congestion and Environmental Risks
Environmental groups are mobilizing against the plan. DarkSky International, an anti-light-pollution organization with 193,000 members, has issued a guide urging supporters to file formal objections with the FCC, warning that the proposal “threatens to change the night sky” and would increase the number of active satellites by roughly 70-fold. Harvard astrophysicist Jonathan McDowell, who tracks satellite constellations, told The Register that “one million satellites are going to be a big challenge for astronomy, especially as they are in higher orbits which is worse for us”.
Research published in Nature Sustainability by MIT aerospace engineers found that greenhouse gas emissions are causing the thermosphere to contract, reducing atmospheric drag that normally pulls old satellites and debris out of orbit. Their simulations predict the “satellite carrying capacity” of the most popular orbital regions could shrink by 50 to 66 percent by 2100. SpaceX currently operates roughly 9,500 of the approximately 14,500 active satellites orbiting Earth.
Ref – www.theregister.com
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