Conference Agenda

Extraordinary growth in artificial intelligence applications and Internet cloud storage requirements has generated a boom in data center construction. Rapidly rising valuation of high-tech companies and generous funding for start-up ventures, attests to frothy exuberance, possibly discounting concerns about data centers’ adverse impact on the environment, and the total capital and operating expenditures required. Nevertheless, data centers currently present a more compelling business case than other conventional real estate investment options, including residential housing, despite clear evidence of perennially insufficient supply.

Launching data centers into space appears to solve, or at least mitigate, several costly terrestrial problems. In sun synchronous, low Earth orbit, data centers may have comparatively less environmental impact and lower operating costs in two increasingly expensive categories: the gigawatts of electricity continuously required to power components, and coolants, such as water and glycol, needed to syphon away heat generated by constant operation. However, these comparative advantages may disappear entirely, or decline significantly, when other higher expenses and greater risks enter the total cost calculation.

This paper’s research question examines whether orbiting data centers can accrue real and potential cost savings over terrestrial installations. The paper also considers whether and how orbiting data centers will bolster prospects for a robust and lucrative new space commerce market development, a main element of this applicant’s current research agenda.

The global consulting firm McKinsey & Company estimates the global space economy will reach $1.8 trillion by 2035, up from their $630 billion estimate for 2023. Low Earth Orbiting satellite constellations have the potential to bridge the Digital Divide by providing a reliable infrastructure for widely available and affordable broadband access, even in remote, rural, and impoverished locales throughout the world. Other developing market opportunities include development of a vibrant space launch and tourism industry, mineral extraction from asteroids, colonization of the Moon and Mars, and an expanded array of services via commercial satellites.

As incumbent and prospective ventures develop business plans for orbiting data centers, they may not fully quantify the costs generated by legal and regulatory issues that persist despite the lack of a fixed, tangible location. The paper considers whether perpetual orbital motion renders data centers unregulatable, in whole or in part, based on the premise that no single national government can assert jurisdiction over intangible and transient assets. Even with certain jurisdiction, a regulatory authority may find it impossible, or quite difficult, to impose sanctions for noncompliance as currently occurs when a satellite carrier provides service to terminals used in unauthorized locations.

The paper compares and contrasts scenarios where treaties, national laws, and regulations apply only where physical presence exists on an ongoing, or even temporary basis. For example, national governments can assert certain jurisdiction over aircraft and ships only when situated within a nation’s sovereign airspace or waters. On the other hand, telecommunications jurisdiction can extend beyond a nation’s territory, or involve multiple national regulatory agencies, when a license applicant seeks authority to launch spacecraft from another country, and construct or lease access to foreign earth station gateways needed for traffic backhaul and spacecraft management.

The paper identifies instances where multilateral and national regulatory authority likely will or will not apply, as well as instances where ventures may successfully evade government oversight.