Europe risks ceding leadership in a rapidly emerging industry unless it urgently develops a roadmap for placing data centres in orbit, according to a new report from the European Space Policy Institute (ESPI).
The institute’s analysis concludes that space-based data centres could become a transformative sector for Europe’s digital and space industries, with the global market projected to reach about €535 billion by 2030. But the authors said the EU must act now to avoid falling behind competitors.
“Europe has world-class space technology and strong institutions… the question is whether we’ll use them to lead this revolution or watch others define the future of computing,” said Jermaine Gutierrez, the report’s lead author.
Data centres, which underpin the computing capacity needed for generative artificial intelligence, require large amounts of electricity and cooling. The European Commission and aerospace group Thales assessed the feasibility of orbiting data centres in 2024, finding they could offer a more environmentally sustainable and sovereign alternative to ground-based facilities. The study said solar-powered systems in orbit could sharply cut carbon emissions and reduce reliance on water-intensive cooling.
Thales also estimated potential financial returns of several billion euros by 2050, provided Europe advances low-emission launch solutions to meet climate targets.
Path forward
ESPI recommended that Europe leverage existing programmes—such as the In-Orbit Demonstration / In-Orbit Validation initiative and the European Space Agency’s General Support Technology Programme (GSTP)—as testing platforms for new technologies. These projects support companies by reducing launch and operational costs for experimental missions and help advance engineering concepts toward flight-ready products.
The authors said the EU should also establish a dedicated initiative to create a clear roadmap for commercially deploying space-based data centres.
Obstacles ahead
Despite the promise of the technology, the report highlighted several major hurdles. Launch costs would need to fall well below current levels to make orbiting data centres economically viable. The Centre for Strategic and International Studies estimates the cheapest available rate at around $1,500 (€1,298) per kilogram on SpaceX’s Falcon Heavy. ESPI said costs must drop to roughly $400 (€346) per kilogram.
SpaceX founder Elon Musk said in 2020 that his Starship vehicle could eventually deliver payloads for about $10 (€8.65) per kilogram, assuming a marginal launch cost under $1 million. ESPI said the advantages of orbital data centres diminish significantly if such targets are not met.
Cooling systems also pose a challenge, as water-based methods used on Earth are impractical in space. Maintenance of orbiting equipment would require new servicing capabilities.
Despite these obstacles, ESPI said Europe’s aerospace and technology sectors are well positioned to address the technical issues and compete in the growing market.
