Maintaining U.S. Competitiveness in the Global AI Race: Data Centers in Space

By: Rayhan Sarwar

Edited by: Stephen Shiwei Wang

Artificial Intelligence (AI) and data-driven technology development rely on significant data center expansion. This infrastructure expansion faces energy, environmental, and public support challenges on Earth. To stay ahead in global AI development, the United States needs a strong supply of sustainable energy, water-efficient cooling systems, and minimal environmental or community disruptions. Orbital space offers the solution.

Land-Based Data Centers: Viral, Loud, and Hungry

A typical data center campus consumes the same amount of power and water as an entire city.1 In areas near data centers, electricity rates have increased by up to 267 percent over the past five years.2 There are currently over 5,400 data centers in the U.S., and the market is projected to grow from $4.9 billion in 2024 to $21.3 billion by 2030.3

To compete with China, the White House acknowledges that a stronger supply of energy is needed.4 Each data center requires enough energy to power over 200,000 homes a year and upwards of 5 million gallons of water for cooling per day. Moreover, the number of data centers in the United States has quadrupled since 2010; they are projected to quadruple again by 2030.5

Utility companies pass on the cost of related infrastructure upgrades to households and businesses. Bloomberg reports wholesale electricity costs are skyrocketing. Northern Virginia has become the global capital of the data center market. Ordinary residents of Baltimore, Maryland, over an hour away, experienced an 80% increase in rates over the last three years.6 Energy providers hand down network expansion costs to consumers who rely on the same grid. 

Water demands also strain local communities. Farmers in Wyoming, for example, fear that water usage by data centers will lead to shortages.7 The proposed plans for a new 1.8 gigawatt campus — five times the amount of energy used by the state’s population — will only exacerbate water concerns.8 Cooling systems on Earth require freshwater for the most effective cooling process.9 Water demand will potentially limit data infrastructure expansion. 

Many communities oppose the noise pollution and health effects of living near data centers. Data centers produce noise that can be heard from as far as two miles away. Residents describe physical symptoms such as headaches, migraines, and disrupted sleep.10 Investigative researchers have begun to expose the energy, environmental, and local risks associated with this rapid proliferation. The NIMBY (Not In My Backyard) movement in Virginia is growing, making it clear that communities are healthier and happier without the droning of data centers yards away from their homes.11

Proposition

Power demands for data centers alone are expected to triple by the end of the decade, with a broader implementation of AI in military, government, business, and personal settings.12 U.S. infrastructure lags behind China in power production.13 While unleashing energy within the U.S. through nuclear energy production is imperative, a promising alternative is solar power in space. Space avoids the limitations of land-based data centers and our subpar power grid. It also avoids several environmental obstacles.

Data centers can be set up and powered as satellites in space, where solar power is more consistent than on Earth.14 Space also offers passive cooling without water.15 This infrastructure would be immune to most cyberattacks on land-based power grids, natural disasters, and wars. 

The United States already dominates space through cost-effective launch capabilities and military protection. This is an unused advantage in terms of data infrastructure. American companies such as Starcloud and Lonestar Data Holdings are working on this solution, fueling an early entry into orbital data centers for the United States.  The U.S. government should back these efforts, considering that earlier this year, China launched the first 12 of a 2,800-satellite data center constellation.16 

The Status Quo: Energy, Environment, and Public Support

The status quo relies on traditional data centers and the existing U.S. power grid. Land-based data centers are proven and replicable, while existing and novel power sources promise energy needs for the immediate future. Proponents of U.S. power generation endorse nuclear and carbon capture as potential solutions to meet power demands and reduce emissions.17 These improvements may support the projected triple energy demand increase.18 The improvements also satisfy the water usage via various techniques and sources such as closed-loop systems and recycled wastewater.19 Leaders promise communities that the proliferation of data centers will not harm them, as this rising industry would bring more employment to the community.20

Nuclear Power Generation 

Nuclear power is clean and carbon-free, but nuclear reactors also have a dangerous history.21 Public support still wavers due to safety concerns such as accidents and waste disposal. This, along with the high cost of construction, makes nuclear power an unreliable option to scale.22 Some data centers plan to incorporate natural gas with carbon capture and storage (CCS) to offset carbon emissions.23 This technology still requires vigorous and significant development and market expansion before offering any sustainable large-scale solutions.24

Water Utilities  

The water footprint of data centers comes mostly from their energy usage. In other words, cooling. Newer centers utilize more power. In the United States, 50 percent of freshwater withdrawal is used for cooling purposes in electricity generation.25 As AI and technology demand more infrastructure to back up their increasing computational powers, so do subsequent energy and water demands create dire competition for resources. This water usage presents environmental challenges that could stifle the growth of infrastructure.

Public Support 

Data centers bring jobs into communities. However, the number of long-term job positions is only a fraction of the initial-phase demand for labor. During the construction phase, up to 1,500 jobs can be created. For ongoing operations, the number shrinks to 50.26 Therefore, data centers consume more resources from people than they can employ, adding disturbances to the communities around data centers that are expecting a more stable source of employment.27

As a result, communities suffer as data centers proliferate.28 To make things worse, communities don’t integrate land-based data centers well, based on the existing economic and social arrangements. Resident Lee D’Amore, who lives a few blocks from where the data center was proposed, put up red “No Data Center” signs around his neighborhood ahead of a City Council meeting in June. He commented, “Once they (the datacenters) are built, there’s nothing you can do… If they violate the decibels, what are you going to do? Fine them $1,000? That’d be like me asking you for a penny. Seriously, once this thing is built, it’s all over but the crying.”29 

Space-Based Data Centers Analysis 

Space-based systems address multiple challenges at once with only one line of effort. By developing the solution in space, costly efforts for power and water systems can be minimized. The United States can lessen the demand on its energy, environment, and communities by shifting data infrastructure into space. 

Energy 

Relying on fossil fuels and nuclear power alone to sustain a quadrupling data center market growth is risky.30 Solar power generation in space is more consistent than it is on Earth – this method also eliminates associated environmental issues such as carbon emissions; renewable solar energy on Earth suffers from intermittent and low-density production.31

In orbit, the sun shines consistently, and the solar power is 36% stronger than on the ground, providing almost ten times more energy. The idea of space-based solar power is uncontested, but one of its most substantial challenges is transmitting the power down to the Earth.32 Data centers in space would bypass this step by only needing to transmit data, which is already widely done by man-made satellites. 

Energy is crucial to our future. Any step that can be taken to minimize energy consumption on Earth benefits society. The Department of War (DOW) will need to carry AI and technology through its peaks to stay ahead on the battlefield. This is highly dependent on data center efficiency and energy infrastructure.

Positive Environmental Impacts 

A benefit of space-based data centers is the phasing out of water systems. Specifically, data centers in space can employ an existing space technology called passive cooling to eliminate the need for water, which has been tested and widely utilized by NASA on its satellites.33 To provide a context, a typical land-based data center uses millions of gallons a day.34 Seawater is less effective than freshwater in cooling systems.35 In the future, traditional data centers will create environmental challenges with their freshwater demands. This is yet another line of effort that can be avoided by shifting data systems into space.

Public Support for Space Data Centers

Operating in space means data centers will be fully automatic without the need for direct human labor, and communities will be free from the environmental impacts of data centers in their vicinity. Only those who profit from data centers see any benefit from having them in their area. For the vast majority, it would be more sensible to have space-based solutions.

Space is a Win All Around       

Even if space-based systems do not fully replace traditional ones immediately, U.S. investment in research and development will help in at least two ways: 1) The supplementation of space-based data centers will aid any struggle to keep up with power production. 2) Space-based systems can house military data, safeguarding sensitive information and functions from most cyberattacks, natural disasters, and wars.

The DOW will safeguard information with added levels of security, while the U.S. fosters advancements of the future. This innovation will enable next-generation warfighting capabilities and U.S. global leadership for generations.

Work Cited

  1. Dayarathna, Miyuru, Yonggang Wen, and Rui Fan. 2016. “Data Center Energy Consumption Modeling: A Survey.” IEEE Communications Surveys & Tutorials 18. No. 1: 732–94. https://doi.org/10.1109/COMST.2015.2481183. 
  2. Saul, Josh, Leonardo Nicoletti, Demetrios Pogkas, Dina Bass, and Naureen S Malik. 2025. “How AI Data Centers Are Sending Your Power Bill Soaring.” Bloomberg. Published on September 29. https://www.bloomberg.com/graphics/2025-ai-data-centers-electricity-prices/?utm_source=website&utm_medium=share&utm_campaign=copy. 
  3. Siddik, Md Abu Bakar, Arman Shehabi, and Landon Marston. 2021. “The environmental footprint of data centers in the United States.” Environmental Research Letters 16, no. 6: 064017. 
  4. The White House. 2025. “AI Action Plan”. https://www.ai.gov/action-plan. 
  5. Siddik, Md Abu Bakar, Arman Shehabi, and Landon Marston. 2021. “The environmental footprint of data centers in the United States.” Environmental Research Letters 16, no. 6: 064017. 
  6. Saul, Josh, Leonardo Nicoletti, Demetrios Pogkas, Dina Bass, and Naureen S Malik. 2025. “How AI Data Centers Are Sending Your Power Bill Soaring.” Bloomberg. Published on September 29. https://www.bloomberg.com/graphics/2025-ai-data-centers-electricity-prices/?utm_source=website&utm_medium=share&utm_campaign=copy. 
  7. Heinz, Mark. 2025. “Cheyenne Farmers Worry Huge Data Center Will Suck Up Their Irrigation Water”. Cowboy State Daily. Published March 7. https://cowboystatedaily.com/2025/03/07/cheyenne-farmers-worry-huge-data-center-will-suck-up-their-irrigation-water/. 
  8. Udinmwen, Efosa. 2025. “OpenAI Might Be Building Its Biggest AI Fortress in Wyoming — and It’s Making the Grid Nervous.” TechRadar. Published August 9. https://www.techradar.com/pro/a-massive-wyoming-data-center-will-soon-use-5x-more-power-than-the-states-human-occupants-and-no-one-knows-who-is-using-it. 
  9. Yan, Mingxuan, Suoying He, Ming Gao, Mengfei Xu, Jiayu Miao, Xiang Huang, and Kamel Hooman. 2021. “Comparative study on the cooling performance of evaporative cooling systems using seawater and freshwater.” International Journal of Refrigeration 121 (2021): 23-32.
  10. Community & Environmental Defense Services. 2025. “How to Protect Your Home from Data Center Impacts.” https://ceds.org/datacenter/. 
  11. Feng, Emily, and Ryan Murphy. 2025. “Why More Residents are Saying ‘No’ to AI Data Centers in Their Backyard”. NPR. Published July 17. https://www.npr.org/2025/07/17/nx-s1-5469933/virginia-data-centers-residents-saying-no. 
  12. Shehabi, Arman, Alex Newkirk, Sarah J. Smith, et al. 2024. United States Data Center Energy Usage Report. Published December 20. https://doi.org/10.71468/P1WC7Q. 
  13. The White House. 2025. “AI Action Plan”. https://www.ai.gov/action-plan. 
  14. Garretson, Peter. 2012. “Solar Power in Space?” Strategic Studies Quarterly 6, no. 1 (2012): 97–123. http://www.jstor.org/stable/26270792. 
  15. National Aeronautics and Space Administration. 2025. “Passively cooled superconductors in space”. NASA TechPort. https://techport.nasa.gov/projects/146556. 
  16. Pamir LLC. 2025. “Space Becomes the New Data Center Frontier as China Launches Its First 12 Satellites for Interstellar AI Processing.” Published June 10. https://pamirllc.com/blog/space-becomes-the-new-data-center-frontier-as-china-launches-its-first-12-satellites-for-interstellar-ai-processing. 
  17. The Global CCS Institute. 2025. “Role of CCS in US Data Centre Decarbonisation.” Published March 18. https://www.globalccsinstitute.com/role-of-ccs-in-us-data-centre-decarbonisation/. 
  18. Shehabi, Arman, Alex Newkirk, Sarah J. Smith, et al. 2024 United States Data Center Energy Usage Report. Published December 20. https://doi.org/10.71468/P1WC7Q. 
  19. Siddik, Md Abu Bakar, Arman Shehabi, and Landon Marston. 2021. “The Environmental Footprint of Data Centers in the United States.” Environmental Research Letters 16, no. 6 (2021): 064017. https://doi.org/10.1088/1748-9326/abfba1. 
  20. Udinmwen, Efosa. 2025. “OpenAI Might Be Building Its Biggest AI Fortress in Wyoming — and It’s Making the Grid Nervous.” TechRadar. Published August 9. https://www.techradar.com/pro/a-massive-wyoming-data-center-will-soon-use-5x-more-power-than-the-states-human-occupants-and-no-one-knows-who-is-using-it. 
  21. US Department of Energy, Office of Nuclear Energy. 2021. “3 Reasons Why Nuclear Is Clean and Sustainable.” https://www.energy.gov/ne/articles/3-reasons-why-nuclear-clean-and-sustainable. 
  22. Mata, Jônatas F.C. da, Rieder O. Neto, Amir Z. Mesquita, and Associação Brasileira de Energia Nuclear (ABEN), Rio de Janeiro, RJ (Brazil). 2017. “Comparison of the Performance, Advantages and Disadvantages of Nuclear Power Generation Compared to Other Clean Sources of Electricity”. IAEA. https://inis.iaea.org/records/gtnmp-b4623. 
  23. The Global CCS Institute. 2025. “Role of CCS in US Data Centre Decarbonisation.” Published March 18. https://www.globalccsinstitute.com/role-of-ccs-in-us-data-centre-decarbonisation/. 
  24. Sifat, Najmus S., and Yousef Haseli. 2019. “A Critical Review of CO2 Capture Technologies and Prospects for Clean Power Generation.” Energies 12, no. 21: 4143. https://doi.org/10.3390/en12214143. 
  25. Ristic, Bora, Kaveh Madani, and Zen Makuch. 2015. “The Water Footprint of Data Centers.” Sustainability 7, no. 8: 11260–84. https://doi.org/10.3390/su70811260. 
  26. McKinsey & Company. 2025. “The Data Center Balance: How US states can navigate the opportunities and challenges.” Published August 8.  https://www.mckinsey.com/industries/public-sector/our-insights/the-data-center-balance-how-us-states-can-navigate-the-opportunities-and-challenges 
  27. Community & Environmental Defense Services. n.d. “How to Protect Your Home from Data Center Impacts.” https://ceds.org/datacenter/. 
  28. Ibid. 
  29. Feng, Emily, and Ryan Murphy. 2025. “Why More Residents are Saying ‘No’ to AI Data Centers in Their Backyard”. NPR. Published July 17. https://www.npr.org/2025/07/17/nx-s1-5469933/virginia-data-centers-residents-saying-no. 
  30. Siddik, Md Abu Bakar, Arman Shehabi, and Landon Marston. 2021. “The Environmental Footprint of Data Centers in the United States.” Environmental Research Letters 16, no. 6: 064017. https://doi.org/10.1088/1748-9326/abfba1. 
  31. Garretson, Peter. 2012. “Solar Power in Space?” Strategic Studies Quarterly 6, no. 1: 97–123. http://www.jstor.org/stable/26270792. 
  32. Ibid. 
  33. National Aeronautics and Space Administration. 2025. “Passively cooled superconductors in space”. NASA TechPort. https://techport.nasa.gov/projects/146556. 
  34. Siddik, Md Abu Bakar, Arman Shehabi, and Landon Marston. 2021. “The Environmental Footprint of Data Centers in the United States.” Environmental Research Letters 16, no. 6: 064017. https://doi.org/10.1088/1748-9326/abfba1. 
  35. Yan, Mingxuan, Suoying He, Ming Gao, Mengfei Xu, Jiayu Miao, Xiang Huang, and Kamel Hooman. 2021. “Comparative study on the cooling performance of evaporative cooling systems using seawater and freshwater.” International Journal of Refrigeration 121 (2021): 23-32.

Author Bio

Rayhan Sarwar is a prior-enlisted, active-duty Remotely Piloted Aircraft (RPA) pilot in the United States Air Force, selected to commission in just under 18 months of service after winning several top accolades in training and operationally. During his service, Rayhan has led numerous restructuring and efficiency projects within multiple units, founded and served as editor-in-chief of a wing-wide military journal documenting the RPA mission, and innovated successful fundraising opportunities for military-affiliated non-profit organizations. Prior to service, Rayhan worked professionally as a theatrical and commercial film actor with dozens of credits, starring in an award-winning historical drama set during the Armenian genocide. Rayhan is also a short-term rental real estate owner-operator and first-year Executive Master of Public Administration candidate with the Jeb E. Brooks School of Public Policy at Cornell University. All views expressed are solely his and do not represent the Department of War or United States Government.

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