Is space the next frontier for digital infrastructure?

When we talk about the foundations of the modern digital economy, few people think about the physical “heart” that makes it all possible: the data center. The internet conjures images of something ethereal and immaterial, yet the truth is more grounded—and power-hungry. Every Google search, every video streamed on Netflix, every AI-generated image, every confidential government document stored on a secure cloud passes through an enormous network of servers consuming electricity at an astonishing pace.

Today, data centers already account for around 1–2% of the world’s total electricity demand, a share expected to grow rapidly as artificial intelligence, 5G, and the Internet of Things (IOT) continually increase the flow and storage of information. And beyond power lies a second, equally pressing challenge: cooling. These massive server farms generate immense heat that has to be managed, requiring cooling technologies that themselves consume energy, often as much as the computing hardware itself.

We are thus running into a bottleneck: the world’s hunger for data is insatiable, but our ability to sustainably build ever-larger data centers on earth is limited. Which leads to the question: where next?

The answer increasingly on the horizon is: outer space.

When engineers think about where to place the next generation of data centers, space seems almost tailor-made for the challenge.

First, there is the issue of cooling. On earth, tech giants have experimented with exotic solutions: Microsoft sank prototype data centers under the ocean to make use of naturally cold water; Scandinavian countries host server farms in cold climates to save on air conditioning. But space has something these partial solutions cannot offer: the perfect vacuum. In orbit, servers can radiate heat away far more efficiently, turning one of the biggest problems into a manageable design opportunity.

Second, there is energy. On earth, server farms are locked into national power grids, often straining them to near breaking point. In space, solar power can be harvested without atmospheric attenuation and without nighttime interruptions. Gigantic solar arrays can convert near-limitless sunlight into electricity for servers. Unlike fossil fuels on earth, this source of energy is abundant, clean, and literally unending at the orbital altitudes where such infrastructure will likely sit.

Third is physical space itself. A hyperscale data center on land consumes enormous tracts of valuable real estate and creates environmental strain wherever it is erected. Space does not share this problem. The orbital “real estate” available, whether in low-earth orbit (LEO) or geostationary orbit (GEO), provides an effectively infinite canvas. Servers floating above the earth would free cities and rural areas from the burden of hosting endless server farms, leaving terrestrial land for housing, agriculture, and industry humans can actually inhabit.

Some may roll their eyes and say this is speculative science fiction. But the groundwork is already being laid in surprising ways.

Consider Microsoft’s underwater data center experiments, known as Project Natick. While humble in scope, these trials successfully demonstrated that servers can be sealed into unique environments, stabilized, cooled efficiently, and managed with minimal interventions. The step from beneath the ocean to orbit might be large, but the logic is identical: extreme environments yield unexpected efficiencies.

Or consider the dominant growth sectors in computing right now: artificial intelligence and large-scale cloud applications. AI alone has ballooned the demand for server space. Training a cutting-edge generative model now requires thousands of high-performance GPUs operating continuously for weeks. Multiply that requirement globally across competing firms and industries, and you see why conventional server farms appear insufficient.

Similarly, the “Internet of Things”—billions of connected devices from smart cars to medical wearables—creates constant streams of data that need to be processed, stored, and served at lower and lower latency. Traditional facilities push against physical barriers in terms of power and network congestion. It is no surprise, therefore, that investors and futurologists increasingly speculate about orbital data farms as “the next cloud frontier.”

The civilian case is compelling enough—but add in national security, and the potential of space-based data centers becomes even more profound.

First and foremost is physical security. A terrestrial data center is vulnerable to cyberattacks, but also to physical strikes, sabotage, or natural disasters. Server farms in Nevada or southern China can be bombed or sabotaged. In space, physical risk is far trickier to impose. Orbital data centers would sit beyond the reach of insurgents or conventional attackers.

Second, the strategic use of data is essential to modern defense. Military operations generate vast volumes of intelligence through satellite imagery, radar, electronic surveillance, and battlefield communications. Currently, much of this information is downlinked to earth and then processed, a time-consuming loop. If servers were in orbit and integrated with satellites, real-time AI processing of imaging and sensor data could occur in space, speeding up reconnaissance and reaction times dramatically. Imagine a defense satellite spotting a missile launch and processing trajectory calculations instantly in space, sending warnings downstream to earth in seconds.

Third, space-based data centers could enhance the cybersecurity of nations. With quantum computing on the horizon and cyber espionage a global threat, hosting critical intelligence databases in orbital infrastructure—secured by hardened encryption and isolated from terrestrial grid vulnerabilities—may become a national priority.

The parallel is clear: just as GPS satellites, originally deployed for military use, transformed both defense and civilian navigation, orbital servers would similarly create dual-use infrastructure enhancing security while also supporting global industry.

Of course, this is not happening tomorrow. Building and operating data centers in orbit will demand surmounting daunting engineering and economic challenges.

While the fortunes of Big Tech in the United States and China will dominate early planning, Israel should be paying close attention. The convergence of three core strengths makes Israel a potential leader:

Although Israel’s launch capacity is limited compared to larger powers, international partnerships—particularly in Europe, the United States, and Asia—could allow Israeli firms to contribute technologies that become indispensable to the orbital server revolution. Much as Israel’s “Iron Dome” system became a global brand, an Israeli cooling technology or data encryption framework could underpin orbital computing infrastructures internationally.

Picture this: It is the mid-2030s. Global cloud providers no longer advertise “server farms in Northern Virginia” or “hyperscale centers in Finland.” Instead, they promote orbital regions: “Cloud available from GEO Asia Hub” or “LEO constellation over Europe.” Your personal health data might reside on servers silently circling the planet at 500 kilometers altitude, cooled by the deep vacuum, powered by unbroken solar streams. Meanwhile, a defense satellite analyzing real-time activity in a hostile region could immediately process gigabytes of imaging through orbital AI centers and beam a secure warning to commanders on the ground in under three seconds.

The scale of this transformation would rival earlier technological revolutions. Just as the internet itself once migrated from academic defense origins into a global engine of commerce and culture, orbital computing could reshape humanity’s relationship with space. Once seen only as the realm of rockets, satellites, and astronauts, space may soon become infrastructure as ordinary—and as indispensable—as the ground we walk on.

The rise of orbital data centers is not science fiction—it is a logical evolution of current pressures. Power and cooling bottlenecks on earth, growing AI demands, defense imperatives, and ongoing space industrialization make this scenario not just possible but probable. The early 20th century saw oil as the resource wars were fought over. The early 21st has seen data take that crown. The mid-21st may see the battleground shift to orbit, where nations and companies compete not over barrel fields or solar panels on rooftops, but over “server farms among the stars.”

As the world rethinks data, Israel and other innovation-driven nations must decide whether to merely observe this new race—or to become pioneers. Because in the end, the cloud may no longer be a metaphor. In a few decades, the “cloud” may very well mean precisely what it sounds like: servers, information, and human knowledge, floating silently above us all, in space.