A blue wave sends tech leaders looking to space for data centers

Democrats won elections to Congress and state legislatures, including in Texas, one of the main hubs for data center construction in the US. Many candidates opposed the industry. After the election, its supporters began discussing moving computing capacity into space. But orbital data centers face technical and financial constraints, and the Texas results could lead to changes in the rules, though Republicans still control the state Senate.

After Democratic wins, the tech industry starts talking about data centers in space

Why space came up

After Democrats’ wins, data center advocates wrote on social media that they still supported the industry but did not necessarily want to build new facilities in Texas—or on Earth at all. Elon Musk, who spent more than $400 million backing Republican candidates who lost in the midterm elections, wrote on X that data centers in space now looked more attractive.

Jordan Lasker, who runs the popular tech-world account Crémieux, also backed the idea. He is known for publishing pseudoscientific material about race. Lasker called space-based data centers a great idea and linked interest in them to the election results.

Over the course of the day, the discussion drew in Musk company employees, investors, AI researchers, venture capitalists and other industry advocates. Soham Mehta, a research fellow at the techno-optimist think tank Foundation for American Innovation, also suggested considering underwater data centers. In June, China began operating a facility that the country calls the world’s first underwater data center.

Who is planning computing in orbit

Several companies are already trying to put computing capacity in space:

Orbital data centers are technically possible, but cost significantly more than ground-based facilities, cannot scale to match the largest terrestrial complexes and depend on satellite launch risks and schedules.

What could change in Texas

The industry’s concerns about change in Texas have a basis, but the new leadership’s options are limited. Democrats won a majority in the state House of Representatives, but Republicans still control the Senate. Robert Patterson, a professor of land use and environmental planning at the University of Texas at Austin, says the split in power could slow some rapid changes.

According to Adrian Shelley, director of the Texas office of the public-interest organization Public Citizen, the state legislature could consider measures with serious consequences, such as reallocating resources among state agencies. A faster route for the governor would be to issue executive orders or demand the resignations of politically appointed agency heads.

State regulators, including the Texas Commission on Environmental Quality, the Public Utility Commission and the Water Resources Board, can impose fines for violations of state law and, in extreme cases, revoke permits for projects, including data center construction. But developers in Texas have special “vested rights”: a project’s terms are protected once a permit is approved, even if construction has not begun.

Another possible change would be to expand counties’ powers. Nearly half of the state’s data centers are in unincorporated areas, which are not subject to city zoning rules. But county powers in Texas are limited by Dillon’s Rule: counties can exercise only the powers the state explicitly grants them. For example, counties regulate road access and construction in floodplains, but they lack zoning powers that would allow them to closely control data center projects.

Patterson says the state’s new attorney general could theoretically revise the language in a handbook that is updated every two years and sets out county powers. He also allows that state legislators could propose a bill granting counties limited zoning powers over data centers. Patterson notes that dissatisfaction with the industry is present in both parties.

Shelley called the upcoming legislative session especially interesting. He said data centers had become one factor behind the “blue wave.” He added that the industry had so far shown little interest in working with state lawmakers and local leaders, and that he would be interested to see whether that changes.

Dataist’s take: Talk of space does not yet remove the practical constraints facing orbital data centers. In Texas, the election results could affect oversight and county powers, but divided control of the legislature and the rights of developers with permits already in hand limit the scope for rapid change.