FCC Opens Review of Elon Musk’s SpaceX Plan for Orbital AI Data Centers

SpaceX CEO Elon Musk’s dream of turning the night sky into a massive, solar-powered brain for artificial intelligence moved a step closer to reality this week as federal regulators began reviewing a plan to launch the company’s new satellite cluster.

The Federal Communications Commission on Wednesday opened public review of a SpaceX proposal to build a non-geostationary satellite system that would move energy-intensive AI computing into orbit, potentially allowing the company to deploy up to one million data-center-style satellites to train xAI models, including Grok.

“The proposed satellites will use high-bandwidth optical inter-satellite links and conduct telemetry, tracking, and command (TT&C) operations,” the FCC wrote. “The Bureau seeks comment on the application and the associated requests for waiver.”

The filing review follows Musk’s decision on Monday to fold his artificial intelligence startup, xAI, into SpaceX, consolidating AI development and launch capabilities within a single company.

“The SpaceX Orbital Data Center system will allow SpaceX to begin delivering much-needed energy-efficient AI compute for consumers, enterprises, and government users around the world,” SpaceX wrote in a waiver request for the filing.

Under the proposal, SpaceX would operate the satellite system at altitudes between about 310 and 1,240 miles, linked through laser-based optical connections.

The network would connect with SpaceX’s existing Starlink constellations, allowing data to be routed and processed in orbit before transmission to ground stations.

AI Data centers are quickly becoming one of the biggest new sources of electricity demand as AI systems scale. In the U.S., they used about 183 terawatt hours of power in 2024, roughly equivalent to the annual energy consumption of Pakistan. That figure is expected to climb as AI training and usage expand.

In its application, SpaceX described the project as a step toward becoming a “Kardashev II-level civilization,” a theoretical measure of a society capable of harnessing the full energy output of its star.

“Global electricity demand for AI simply cannot be met with terrestrial solutions, even in the near term, without imposing hardship on communities and the environment,” Musk said in a statement. “In the long term, space-based AI is obviously the only way to scale. To harness even a millionth of our Sun’s energy would require over a million times more energy than our civilization currently uses.”

The non-geostationary orbit system would also represent a departure from the company’s consumer-focused Starlink internet service, instead positioning satellites as space-based computing infrastructure designed to operate beyond the power and cooling constraints of AI development on the ground.

The company says operating in low Earth orbit would allow it to rely on near-constant solar power while reducing dependence on water- and energy-intensive cooling systems that have drawn increasing scrutiny from regulators and local communities.

The FCC’s action begins a formal public comment period and regulatory review window through March 6, allowing researchers, environmental groups, and industry competitors to weigh in on the proposal.

In January, the FCC approved a major expansion of SpaceX’s second-generation Starlink system, authorizing 7,500 additional satellites. The new orbital data center proposal, however, introduces separate regulatory issues, including competition, and an increase in space junk already orbiting the planet.

While the FCC has previously supported expansions of SpaceX’s satellite networks, the agency’s acceptance of the orbital data center application for filing does not mean approval.