Orbital data centers face major hurdles before practical use despite Musk's 2027 target

Orbital data centers would be a help to the massive AI buildout, but a number of major advancements need to come before they're really practical.

SpaceX CEO Elon Musk is aiming for a launch in late 2027, but other industry watchers say significant scale is more likely to come in the 2030s.

"It's a next-decade event," according to Evelyn Chow, portfolio manager at Neuberger. "We'll need to see significant satellite launches over the next four to five years, and a concomitant buildout of connectivity, before we can start to contemplate true scale in orbital data centers," she told "Squawk Box Asia" on Wednesday.

Blaine Curcio, the founder of Orbital Gateway Consulting, says the 2030s timeline is a "fair assessment," but warns that SpaceX has proven investors wrong before. "Had you asked any satellite industry expert in the late 2010s whether SpaceX could launch 10,000 satellites by 2025, every single one of them, myself included, would have said 'no chance,'" he said.

Here are some of the issues that need to be overcome: