SoftBank CEO Questions Elon Musk’s Orbital Data Centre Plans

SoftBank CEO Masayoshi Son has questioned the trending idea of hosting data centre operations in space, a proposition spearheaded by SpaceX CEO Elon Musk.

Speaking at SoftBank’s annual shareholder meeting this week, Masayoshi highlighted the economic and practical hurdles behind putting data centres in orbit.

He questioned the overall benefit of hosting centres in space as opposed to on earth, asking: “What's the benefit of building an AI data centre in space?”

Masayoshi said this in response to a shareholder question on the subject, arguing that lower electricity costs would not be enough to justify the complexity of operating a data centre in space.

The logistics of operating an orbital data centre

During the talk, Masayoshi also contended that electricity accounts for only 7% of the cost of running AI infrastructure, whereas chips needed to run and train AI models make up the remaining 93%.

He added that potential savings from lower electricity costs would be outweighed by the additional maintenance, networking and latency-related costs needed to feasibly operate an orbital data centre.

Masayoshi discussed the economic and technical trade offs related to space-ready infrastructure, arguing it could take years to figure out. In light of AI discussions, he added that SoftBank is ready to lead the way in the global AI race.

He said that “the winner will be decided in the next some years” and rather than focusing on space-related ventures and the uncertainty over their logistics, SoftBank will focus on a more “near-sighted perspective” in addition to its goal to become “first-comer in any businesses related to AI”.

Despite criticising the idea of orbital data centres, the CEO prefaced his criticism by praising Elon as a pioneering figure in the tech industry. Elon’s plans for this kind of technology was recently the centre of the tech world after he announced at an event in March that space-based, solar-powered data centres would be more cost-effective than the terrestrial alternative.

“Increasing power on Earth becomes harder over time and more expensive over time, but in space it becomes actually cheaper and easier over time,” Elon claimed.

Support and criticism from the wider industry

Earlier this year, SpaceX announced plans to build a “constellation of a million satellites that operate as orbital data centers” and that it had already begun to hire engineers to make this vision possible.

Other tech industry leaders such as Amazon founder Jeff Bezos and Google CEO Sundar Pichai have also discussed the idea and potential benefits of operating data centres in space to help scale AI.

Sundar said the concept was a “moonshot” idea but added that it was only a matter of time before the tech industry realistically starts to seriously consider the possibility of the idea.

Alternatively, OpenAI CEO Sam Altman openly criticised Elon's space-based data centre idea, labelling the notion as “ridiculous”.

During an interview with Indian Express in February, he said: “We are not there yet. There will come a time. Space is great for a lot of things. Orbital data centres are not something that's going to matter at scale this decade.”