Musk: Data centers in space look attractive

Democrats came out strong in the US elections, so data centers in space came to the fore again. As a matter of fact, Elon Musk said that after these results, the idea now looks quite attractive. On the other hand, analysts say that the pace of artificial intelligence investments may decrease.

Accordingly, Democrats took control of both the House of Representatives and the Senate. They also won governor's seats in traditionally Republican states like Texas.

Why Is Texas So Important?

Because Texas is a critical state for artificial intelligence infrastructure. For example, approximately 25 percent of the planned US data center capacity by 2030 is located here. In addition, the large load energy queue held by ERCOT reaches 474 gigawatts.

On the other hand, Gina Hinojosa (D), who won the governor's election, wants zero subsidies for data centers. In addition, he advocates unionized labor and non-disclosure agreements (NDAs). It also demands proof that the investments will not increase households' water and electricity bills.

But Altimeter Capital's Brad Gerstner sees it likely that Hinojosa will declare a moratorium on data centers. Moreover, the market has already started to price this risk. As a matter of fact, according to Gerstner, Nvidia decreased by 2 percent and CoreWeave decreased by 6 percent. In fact, Nasdaq's annual increase decreased from 15 percent to 11 percent.

10-15 GW Risk in 2027 Plans

First of all, according to SemiAnalysis' prediction, a total of 43 GW capacity will come into operation in 2027. However, by the end of 2026, the total capacity in the USA will be approximately 38 GW. Therefore, next year, more capacity will be added than the total capacity installed to date.

Moreover, Gerstner says that he had previously expressed on stage that even half of this plan might not come true. Additionally, the reactions from Greg Abbott's circle increased his anxiety. That's why he now thinks that the process will slow down even more with the Democratic wave. Therefore, according to him, 10-15 GW of the expected investment may not come into play.

However, the picture is not completely closed. Because many players in the field of artificial intelligence stood close to both parties before the midterm elections. They even formed private PACs that serve both parties. Therefore, there is a narrow but possible path to reconciliation.

Musk and the idea of data centers in space

On the other hand, Musk was one of those most affected by the election results. Moreover, the billionaire joked that the "space lasers interfering with the elections" did not work this time. He then commented: “Data centers in space are looking very attractive right now.”

First of all, Musk's plan is to carry petawatt-scale artificial intelligence computing power into space. Therefore, it aims to mass produce computing satellites on the Moon. The satellites will then be launched into deep space orbit via a long electromagnetic rail similar to maglev trains. However, the schedule of the plan has not been announced yet.