Tech Industry Eyes Space For Data Centers After Election

A wave of Democratic candidates winning state and congressional races has sent the tech industry scrambling for alternative locations for data centers, with some looking to space as a potential solution. According to WIRED AI, this shift is particularly notable in Texas, a national data center hot spot and home to Elon Musk’s SpaceX. The state's data center industry may face changes under the new leadership. Data center enthusiasts have taken to social media to express their support for space-based data centers.

Elon Musk, who spent over $400 million supporting Republican candidates, has been leading the charge for data centers in space. Musk posted on X that space-based data centers are 'looking pretty appealing' after the election results. Other tech industry figures, including Jordan Lasker, have also expressed support for the idea. This shift in focus may be driven by concerns about potential regulatory changes in Texas.

Several companies are already working on space-based data centers, including Google, SpaceX, and Blue Origin. Google has launched a satellite with 'data center class TPU', while SpaceX aims to deploy 'thousands of AI satellites' starting in late 2027. Blue Origin has filed for a permit to launch 50,000 satellites for an 'orbital data center system'. These companies may be ahead of the curve in terms of adapting to potential changes in the industry.

However, experts note that building data centers in space is technically possible but comes with significant challenges. Space-based data centers are more expensive than land-based ones and are subject to the risks of satellite launches. Despite these challenges, some startups, such as Starcloud, are working on building data centers in space. Starcloud claims to have carried the first Nvidia H100 GPU into orbit in November 2025.

The change in leadership in Texas may lead to concrete changes in the data center industry, albeit with limits. Experts tell WIRED AI that the split legislature, with Democrats controlling the House and Republicans controlling the Senate, may stymie some attempts at change. However, the governor could effect more immediate changes through executive orders or requesting the resignation of officials in state agencies. The legislature may also hash out high-impact policies, such as the reallocation of state agency resources.

Another potential route to reshaping the data center industry in Texas could be to give more power to counties. Nearly half of the state's data centers exist in unincorporated territory, outside the jurisdiction of city zoning laws. Texas counties have limited enforcement abilities, but the new attorney general could adjust the terms of the state's biannual handbook to establish the limits of county authority. State lawmakers could also propose a bill giving counties limited zoning authority over data centers.

The upcoming legislative season is expected to be 'very interesting' for the data center industry, according to Adrian Shelley, director of Public Citizen's Texas office. Shelley notes that the data center industry has not shown much interest in working with state lawmakers or local leaders, and it will be interesting to see if that changes. The industry may need to adapt to new regulations and policies in Texas, and potentially look to space as a viable alternative for data centers.