SoftBank's Son dismisses space-based AI data centers, calls economics unfavorable

Masayoshi Son, chairman of Japan's SoftBank Group, said he sees little advantage in the space-based AI data center project being pursued by SpaceX CEO Elon Musk.

Speaking at SoftBank Group's annual shareholder meeting for its telecommunications unit Monday, Son said that power cost savings — widely cited as the main benefit of space-based AI data centers — represent only a small fraction of overall data center operating costs compared with hardware such as chips, Bloomberg reported.

He added that savings on power would be outweighed by the far greater expense of launching all the equipment into orbit, along with ongoing challenges such as communication latency and maintenance.

When a shareholder asked whether SoftBank was preparing anything similar to Musk's space AI data center initiative, Son said the next few years would matter far more than what might happen a decade from now in the AI race.

Son praised Musk as "a remarkable agent of change," but said SoftBank would focus on building "massive" data center capacity on the ground.

Son has previously committed to investing about $65 billion in OpenAI and pledged to pour hundreds of billions of dollars into data center and related infrastructure around the world.

Musk, meanwhile, has been making the case for the technical feasibility of his space AI data center ambitions, offering a partial public look at the project in recent weeks.

On June 8, Musk posted a 31-minute video on his social media platform X, formerly Twitter, filmed at SpaceX's Starlink terminal factory in Bastrop, Texas, in which he outlined his vision for a solar-powered orbital AI data center.

"There's no 'magic' required for AI satellites that doesn't already exist," Musk said, adding that much of the technology developed for the Starlink V3 satellite would carry over. "It's not a particularly hard problem compared to what we're already doing," he said.

Musk also unveiled a prototype design for the first AI satellite, dubbed "AI1," alongside SpaceX engineer Ian Dahl.

AI1 is designed to deliver up to 150 kilowatts of computing power per satellite and would have a wingspan of 70 meters — roughly equivalent to a single Nvidia GB300 rack used in ground-based data centers.

Musk said AI satellites would be simpler in structure than existing Starlink satellites, making mass production easier. He also highlighted the power and cooling advantages of space, noting that "the sun always shines in space" and that beyond the atmosphere, satellites can capture about 36 percent more solar radiation than on the ground, with no cloud cover or atmospheric losses.

Skeptics remain, however. Jeff Bezos, founder of Blue Origin and Amazon, has flagged AI chip costs and launch expenses as obstacles and expressed caution about Musk's timeline. Andrew McCollip, a researcher who analyzed the economics of space-based data centers, said the numbers "don't add up for the time being."

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