MW SpaceX and Google may become even more tightly linked through this far-out venture

By William Gavin

The companies are reportedly in discussions over potential space-based data centers

Google has a roughly 6% stake in SpaceX.

Google is already a major investor in SpaceX, and soon the companies may ink a deal that links them even more tightly from a business perspective.

Elon Musk's rocket-launch company is in talks to help Google with its efforts to put data centers in space, according to the Wall Street Journal. Some in the industry see satellite-based data centers as a solution to the rising electricity demands created by the artificial-intelligence boom.

Google, which is owned by Alphabet $(GOOG)$ $(GOOGL)$, is also in talks with other rocket-launch companies, the Journal reported.

SpaceX and Google did not immediately return MarketWatch's request for comment.

Leaders at both companies are among those who glimpse immense potential in the idea of powering AI on Earth by using a constellation of satellites packed with AI chips to collect solar energy. Unlike with data centers on Earth, SpaceX and Google wouldn't have to worry about upsetting nearby residents, who often object to the projects.

See more: The 'SpaceX mafia' is here. Elon Musk's big IPO could launch a constellation of new companies.

However, projects like these would likely take years to scale. For now, orbital data centers remain much more expensive than those built on Earth, and issues like those caused by space radiation need to be mitigated.

SpaceX in February filed for permission to launch up to 1 million satellites that would function as data centers and kicked off a chip-making project with Tesla $(TSLA)$ to support its plans. Google, meanwhile, is taking things slow, first pursuing a pilot program with its partner, Planet Labs $(PL)$, called Project Suncatcher. It eventually visions an 81-satellite cluster that it could build with Planet Labs.

"Global electricity demand for AI simply cannot be met with terrestrial solutions, even in the near term, without imposing hardship on communities and the environment," Musk said in February. "In the long term, space-based AI is obviously the only way to scale."

Nvidia (NVDA) CEO Jensen Huang has also expressed interest in orbital data centers, while Amazon (AMZN) founder Jeff Bezos's Blue Origin has its own plan for data centers in space. Meta Platforms (META) last month signed a deal to buy "orbit-to-grid" energy from a startup.

On Monday, Robinhood Markets (HOOD) co-founder Baiju Bhatt's newly renamed Cowboy Space Corp. said it had raised $275 million to pursue the goal of running AI compute in orbit. Fellow startup Star Catcher on Tuesday said it had raised $65 million to build a "power grid in space," partially to support orbital data centers.

"Cowboy is building at exactly the right moment, as demand for AI compute and energy begins to outstrip what terrestrial infrastructure can support," Index Ventures Partner Jan Hammer, whose firm led Cowboy's fundraising, said in a statement.

If Google does link up with SpaceX, it would be the latest move tying the major companies together. Google invested in SpaceX in 2015 and now has a roughly 6% stake in the company, according to a recent filing.

See more: Google is now a glorified venture-capital fund thanks to its SpaceX and Anthropic stakes

SpaceX is reportedly targeting a June public listing and aims to raise $75 billion at a valuation of up to $2 trillion. At that target, Google's stake in SpaceX could easily be worth more than $100 billion.

SpaceX last week also signed a deal with another recipient of Google's investment dollars: the AI lab Anthropic. The Claude creator plans to use all of the compute capacity at SpaceX's Colossus 1 data center in Tennessee and "expressed interest in partnering with SpaceX to develop multiple gigawatts of orbital AI compute capacity," according to a press release.

-William Gavin

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May 12, 2026 13:44 ET (17:44 GMT)

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