How Elon Musk’s billion-dollar space data centre dream may face the same fate as Microsoft’s ‘under water’ experiment – The Times of India

When Microsoft lowered a shipping container-sized data centre to the bottom of the Scottish seabed in 2015, it looked like a glimpse of computing’s future. A decade later, the project is dead – abandoned due to a lack of customer interest, with Microsoft confirming it no longer operates any underwater facilities.

Now, as Elon Musk sets his sights even higher, industry experts fear SpaceX may be heading toward the same dead end, with the price of failure may be higher.

Musk’s bet for Space data centre and what happened with Microsoft

SpaceX filed for an IPO on Wednesday with Musk declaring that the proceeds will fuel launching up to one million data-centre satellites into orbit, creating a vast AI computing network in space that bypasses the power and water constraints of Earth-based facilities.Between 2015 and 2022, Microsoft pursued Project Natick, an experimental effort to host data centres on the ocean floor, cooled naturally by seawater and powered by offshore wind and tidal energy.

But it was shelved. Citing two sources with direct knowledge of the project, a report by news agency Reuters said that underwater data centres were ultimately abandoned due to economics and a simple lack of client demand.

This means that while the technology worked, customers showed no interest in scaling it. Microsoft, for its part, said it would continue using Project Natick as a research platform.

Why experts say Space may be worse than underwater

Five data centre specialists told Reuters that Microsoft’s experience can be a direct warning for SpaceX.

Both projects rely on sealed, modular units that are expensive to deploy and cannot be easily expanded, repaired or upgraded. “These problems are likely to be more severe in space than under the sea,” Roy Chua, founder of industry research firm AvidThink, was quoted as saying. Apart from challenges around cooling data centres in the vacuum of space, the expert also pointed out the enormous cost of rocket launches. To hit Musk’s targets, SpaceX may have to complete 3,000 Starship launches per year, which is roughly eight every single day.

Jensen Huang’s take: Stay on the ground

Perhaps the most pointed scepticism has come from Jensen Huang, CEO of Nvidia, the company that sells chips that power virtually all of the world’s leading AI systems. Speaking on the All-In podcast in February, Huang said the economics of space-based AI data centres simply do not add up right now.“We should definitely work on the ground first because we’re already here,” Huang said, describing orbital AI infrastructure as a long-term engineering challenge rather than anything close to a near-term solution.