SpaceX’s 2028 Orbital AI Data Centers Threaten AWS, Microsoft AI Grows 123%
AMZN•Elon Musk’s plan for SpaceX to deploy orbital AI data centers via laser links and vacuum cooling by 2028 could squeeze AWS operating margins. Q3 Cloud revenue rose 18% with AI growth of 123% to a $37 billion run rate, trading at a P/E of 25 and upping pressure on AWS.
1. SpaceX Orbital Data Center Proposal
Elon Musk has outlined plans for SpaceX to launch modular AI data centers into orbit by 2028, using fleets of small satellites that link via optical lasers and radio frequencies to operate as a unified server farm.
2. Cooling and Energy Efficiency
By radiating heat directly into space and harnessing uninterrupted solar power, these orbital facilities would eliminate traditional air-cooling systems and dramatically reduce energy expenses.
3. Competitive Pressure on AWS
If realized, the long-term cost advantages of space-based computing could force Amazon Web Services to reprice offerings or invest in new cooling and energy technologies to maintain margins.
4. Microsoft AI Cloud Growth
In Q3 FY2026, Microsoft’s cloud division saw revenue climb 18%, with the AI segment surging 123% to a $37 billion annual run rate and trading at a P/E of 25, intensifying rivalry in the cloud market.
