Google, SpaceX Reportedly In Talks To Launch Data Centers In Orbit

• Google aims to launch two prototype satellites by early 2027 as part of Project Suncatcher.
• Google CEO Sundar Pichai announced the company’s plans in November last year to begin building AI data centers in space to harness the sun’s power.
• SpaceX CEO Elon Musk has been touting the importance of data centers in space, stating that this is by far the fastest way to scale within four years. 

Alphabet Inc.’s (GOOG, GOOGL) Google is reportedly in talks with SpaceX to launch data centers in orbit as it looks to take the first step toward harnessing solar power in space.

According to a report by The Wall Street Journal citing a person familiar with the matter, Google is also in talks with other rocket launch companies.

Google is one of the early investors in SpaceX, with a 6.1% stake in the Elon Musk-led startup, which is reportedly aiming for a $1.75 trillion valuation in an initial public offering (IPO) this year.

SpaceX is currently not listed, while Alphabet’s Class A shares were down 1% in Tuesday's midday trade. Retail sentiment on Stocktwits around GOOGL stock trended in the ‘bearish’ territory at the time of writing.

Potential Boost Ahead Of SpaceX IPO

Any partnership with Google could further strengthen investor interest in SpaceX ahead of its anticipated IPO later this year.

Musk has been touting the importance of data centers in space, arguing that orbital compute infrastructure could become the fastest way to scale AI capacity within the next four years.

“Satellites with localized AI compute, where just the results are beamed back from low-latency, sun-synchronous orbit, will be the lowest cost way to generate AI bitstreams in <3 years,” he said in a post on X in December last year.

The push toward orbital data centers comes amid growing power, cooling, and infrastructure demands from AI companies needed to support the next wave of artificial intelligence growth.

GOOGL’s Project Suncatcher

Google CEO Sundar Pichai announced the company’s plans in November last year to begin building AI data centers in space to harness the sun’s power. The company aims to launch two prototype satellites by early 2027.

“We want to put these data centers in space, closer to the sun, and I think we’re taking the first step in 2027. We’ll send tiny, tiny racks of machines and have them in satellites, test them out, and then start scaling from there,” he said.

Pichai described it as one of the company’s “moonshots” as it explores ways to harness solar energy more effectively, which he said is about 100 trillion times greater than the energy currently produced on Earth.

He also said that within the next decade or so, space-based data centers could become the standard approach for expanding computing infrastructure.

Why Is GOOGL Approaching SpaceX?

SpaceX is among the most prolific spaceflight companies in the world, with 649 completed missions and 610 landings in total.

The company operates the reusable Falcon 9 rocket platform, designed to dramatically lower launch costs and transport heavier payloads into orbit. That could become critical if Google eventually scales from experimental satellite racks to full-fledged orbital data center infrastructure.

GOOGL stock is up 23% year-to-date and 142% over the past 12 months. The S&P 500 ETF (SPY) is up 26% over the past 12 months, while the Invesco QQQ Trust (QQQ) is up 37%.

Also See: Goldman Sachs' John Waldron Dismisses AI Capex Concerns, Says It Will Continue At A ‘Very Healthy Clip’

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