Sam Altman Dismisses Musk’s Space Data Center Plans as ‘Ridiculous’

Quick Facts

• Sam Altman called Elon Musk’s orbital data center plans ‘ridiculous’ citing launch costs and hardware maintenance challenges
• SpaceX acquired xAI for $250 billion in the largest merger ever, with space-based data centers as a key driver
• AI data centers could consume 12% of U.S. electricity by 2028, up from 4% in 2023

OpenAI CEO Sam Altman publicly dismissed Elon Musk’s plans for space-based data centers as economically unfeasible during a Q&A session in India this week. The criticism comes as Musk’s companies move forward with ambitious orbital computing projects.

“I honestly think the idea with the current landscape of putting data centers in space is ridiculous,” Altman said at The Indian Express event. “If you just do the very rough math of launch costs relative to the cost of power we can do on Earth, to say nothing of how you are going to fix a broken GPU in space, and they do break a lot still, unfortunately. We are not there yet.”

Altman’s comments followed SpaceX’s acquisition of xAI for $250 billion in what became the largest merger in history. The combined company is now valued at $1.25 trillion. Musk wrote in a company memo that orbital data centers were a primary motivation for the merger.

SpaceX has filed Federal Communications Commission plans for up to one million satellites designed as orbital data centers. The satellites would use solar power to run onboard computing systems for AI applications. xAI currently burns approximately $1 billion monthly, according to Bloomberg.

Energy Consumption Debate

Altman also addressed claims about AI’s environmental impact. When asked about reports that a single ChatGPT query consumes 17 gallons of water and energy equivalent to 1.5 iPhone battery charges, he called the figures “completely untrue, totally insane and have no connection to reality.”

However, AI energy consumption remains a significant concern. The U.S. Department of Energy projects AI data centers will consume 12% of the country’s electricity by 2028, compared to 4% in 2023. The International Energy Agency forecasts global data center electricity use could reach 1,000 terawatt-hours annually by 2026.

Competing Space Projects

Google is also exploring space-based computing through Project Suncatcher, planning to launch two prototype satellites by early 2027. The company estimates launch costs must drop to $200 per kilogram to make orbital data centers economically viable compared to Earth-based facilities.

Google CEO Sundar Pichai acknowledged the technical challenges: “Like any moonshot, it’s going to require us to solve a lot of complex engineering challenges.” Early tests show Google’s Trillium-generation TPUs can survive space radiation levels.

Deutsche Bank estimates orbital data centers won’t reach cost parity with terrestrial facilities until well into the 2030s, contradicting Musk’s prediction of two to three years. Over 15,000 satellites already orbit Earth, with projections reaching 500,000 by the late 2030s.

Read more: Sam Altman defends AI’s resource consumption and ridicules Musk’s plan to put data centers in space