The AI Podcast

Episode: SpaceX Asks FCC for 1M AI Data Centers in Space

Date: February 6, 2026
Host: Jaden Schaefer

Overview

In this episode, host Jaden Schaefer breaks down SpaceX’s groundbreaking proposal to launch one million AI data center satellites into Earth’s orbit. Sparked by SpaceX's recent FCC filing and the completed merger with XAI, the discussion explores the logistics, motivations, and possible repercussions of shifting major AI computation off-planet. The episode draws on fresh public statements from Elon Musk, regulatory reactions, and merger details, giving listeners an accessible yet in-depth look at how space-based data centers could fundamentally reshape the AI industry and global infrastructure.

Key Discussion Points & Insights

1. SpaceX’s Proposal: What Does It Entail?

• FCC Filing for a Million Satellites:

  • SpaceX has requested permission from the FCC to launch up to one million data center satellites into orbit. [00:30]
  • "A million satellite data center network... They have filed paperwork to request to be able to shoot a million data center satellites up orbiting the Earth." — Jaden Schaefer [00:30]

• Public Reaction and Skepticism:

  • Initial skepticism around the idea, with some dismissing it as another Elon Musk spectacle aimed at boosting valuation before a potential IPO.
  • Jayden points out that developments over the week, including the merger and FCC actions, suggest genuine intent:
    • "At first I think a lot of people said this is like, oh, you know, this is just Elon... In reality, I think this might be an actual really, really smart move for both of his companies." [01:44]

2. The SpaceX - XAI Merger

• Merger Motivation and Details:

  • SpaceX officially merged with XAI, making formal infrastructure sharing likely.
  • The merger is widely perceived as an effort to consolidate resources for large-scale compute in orbit.
  • Notably, the merger has made SpaceX/XAI the most valuable private company at $1.25 trillion according to Bloomberg. [06:37]
  • "According to Bloomberg, this whole SpaceX XAI merger values them at about $1.25 trillion and it makes it the most valuable private company in the world." [06:37]

• Strategic Fit:

  • SpaceX’s core business is launching objects into space, while XAI demands unprecedented computing power.

3. Regulatory and Technical Landscape

• FCC’s Reception:

  • The FCC has formally accepted the filing and opened it for public comment—a crucial regulatory step. [03:10]
  • FCC chairman Brendan Carr publicly expressed support on X (formerly Twitter), provided operations remain US-based.

• Satellite Lifecycle Regulation:

  • New FCC rules require satellites to be brought down after five years (“deorbit” plans).
  • "…thing is, the FCC rules now require satellites to be brought down after five years. So… even these data centers are going to, are going to have to do that as well." [08:56]

4. Musk’s Rationale for Space-Based Data Centers

• Efficiency and Environmental Factors:

  • Solar panels in space generate ~5x more power than on Earth.
  • Space is cold, so natural temperature minimizes cooling needs—leading to massive cost and environmental benefits.
  • "A solar panel gives you about five times more power in space than on Earth, so ends up being much cheaper..." — Elon Musk on the Cheeky Pint Podcast, quoted by Jaden Schaefer [04:01]
  • "These data centers, floating satellite data centers around the Earth...don't need to be cooled because there is, you know, it's freezing cold in space." [04:21]

• Long-Term Vision and Scale:

  • Musk predicts that within five years, orbit-based AI compute will exceed that on Earth:
    • "Mark my words, in about 30 to 36 months the most cost effective place to run AI will be space." — Elon Musk [05:12]
    • "Within five years, more AI compute power is going to be launched and run in orbit each year than the total amount operating on Earth." [05:25]

• Societal Pressure and Local Strain:

  • Recent backlash against the strain of XAI’s Memphis, TN data center highlighted the downside of placing high-demand AI infrastructure on the ground.
  • Quoting Musk’s merger memo:
    • “Current advances in AI depend on large data centers on Earth which need enormous amounts of power and cooling… Demand for AI cannot be met on Earth alone without putting pressure on communities and the environment.” [07:29]

5. Engineering & Business Challenges

• Technical Logistics:

  • Maintenance in orbit is a critical challenge highlighted by guests on the Cheeky Pint Podcast.
  • Dorkish Patel (on the Cheeky Pint Podcast), quoted via Jaden Schaefer:
    • "But he also brought some really interesting concerns which is what happens when hardware fails during AI training, like how do you fix it in orbit? This is not exactly straightforward." [04:53]

• Recurring Revenues for SpaceX:

  • Regular satellite launches and forced deorbiting mean steady, recurring demand for launches, fitting perfectly with SpaceX’s model.

• Financial Metrics:

  • XAI is burning ~$1 billion a month (approx. $12 billion/year).
  • SpaceX currently earns 80% of revenue from their own Starlink satellites, not outside contracts. [07:50]

Notable Quotes & Memorable Moments

• Elon Musk on Scaling Compute in Space:
  • "It's harder to scale on the ground than it is to scale in space." — Elon Musk, quoted from the Cheeky Pint Podcast [03:41]
• On Space-Based Solar Power Efficiency:
  • "A solar panel gives you about five times more power in space than on Earth, so ends up being much cheaper..." — Elon Musk [04:01]
• Bold Prediction for the Industry:
  • "Mark my words, in about 30 to 36 months the most cost effective place to run AI will be space." — Elon Musk [05:12]
• On Environmental Impact:
  • “Current advances in AI depend on large data centers on Earth which need enormous amounts of power and cooling… Demand for AI cannot be met on Earth alone without putting pressure on communities and the environment.” — Elon Musk, from the merger memo [07:29]

Important Timestamps

• [00:30] – Breaking the news: SpaceX FCC filing for 1 million data center satellites
• [02:15] – SpaceX and XAI merger: context and strategic rationale
• [03:10] – FCC acceptance and public regulatory support from Brendan Carr
• [03:41] – Elon Musk: “It's harder to scale on the ground than it is to scale in space.”
• [04:01] – Musk on the Cheeky Pint Podcast: space solar panel efficiency
• [04:53] – Dorkish Patel (via Jayden): challenges with orbit-based hardware maintenance
• [05:12] – Musk’s timeline predictions for cost-effective space AI compute
• [05:25] – More compute power in orbit than on Earth, forecast within five years
• [06:37] – Merger valuation and business structure update
• [07:29] – Merger memo lays out the environmental argument
• [08:56] – Satellite deorbit regulation and recurring launch business

Tone & Language

• Direct and Analytical: Schaefer maintains an accessible, enthusiastic, and pragmatic tone.
• Fact-Focused, Citing Multiple Sources: Frequent references to regulatory documents, public quotes, and financial reports.
• Balanced Skepticism: Acknowledges initial disbelief but transitions to analysis based on current developments and filings.

Summary

This episode takes listeners on a deep dive into SpaceX’s bold vision for the future of AI infrastructure—one in which space-based data centers power tomorrow’s leading models, untethered from the environmental, political, and logistical constraints of life on earth. Host Jaden Schaefer skillfully connects regulatory filings, technical possibilities, industry scuttlebutt, and public statements to reveal both the audacity and the challenges of this next leap for AI. Through fresh quotes from Elon Musk and practical analysis, the episode positions this story as more than hype—a likely harbinger of things to come for global AI compute.