Rapid growth in AI-driven power consumption is intensifying the search for new data center solutions, including facilities in orbit, Wood Mackenzie said Thursday.
AI is putting a growing strain on computing infrastructure. According to Wood Mackenzie, next-generation AI agents could consume 10,000 to 40,000 times as much computing power per task as current chatbots.
From 460 terrawatt-hours in 2026, global data center electricity demand could climb to 1,280 TWh by 2030 and 3,700 TWh by 2040. Wood Mackenzie said that represents 16% annual growth and a 703% increase from current levels.
The US and China make up 78% of planned global data center capacity. At the same time, developers face grid connection delays of up to seven years, equipment shortages through 2030, water limitations and higher construction costs, the report said.
As those constraints intensify, companies are examining space-based alternatives. However, Wood Mackenzie estimated that a 1-gigawatt orbital data center would cost about $170 billion, with launches and satellites accounting for roughly 60% of total spending.
To compete with terrestrial facilities, orbital data center costs would need to decline by about 70%, the report said. Falling launch costs support that possibility, with reusable rockets reducing costs by roughly 90% versus earlier technologies.
Space activity continued to expand in 2025 as launch attempts increased 25% to 324, while satellite deployments surged 58% to a record 4,517. Commercial operators carried out 70% of launches, and private companies owned 87% of deployed satellites.
SpaceX and xAI aim to add 100 GW of orbital computing capacity each year, equal to ten times the combined announced capacity of all other developers. Outside the US, planned orbital capacity totals less than 0.5 GW, Wood Mackenzie strategists said.
Despite growing interest in orbital projects, companies continue directing capital toward terrestrial assets. Anthropic committed $45 billion over three years to SpaceX for access to the 300 megawatt Colossus 1 data center, which houses 220,000 Nvidia GPUs.
Wood Mackenzie expects companies to spend about $9 trillion between 2026 and 2040 to add roughly 395 GW of terrestrial data center capacity. The firm noted that no gigawatt-scale orbital or terrestrial facility exists today and expects ground-based development to remain the industry's primary focus.