- Global data centre electricity demand is projected to rise from 460 TWh in 2026 to 3,700 TWh by 2040, representing growth of 703%.
- A 1 GW orbital data centre would cost about US$170 billion, more than three times the cost of an equivalent terrestrial facility.
- Wood Mackenzie forecasts US$9 trillion in terrestrial data centre investment by 2040 despite growing interest in space based computing infrastructure.
Rapid growth in artificial intelligence is driving unprecedented demand for computing power, prompting some of the world’s largest technology companies to explore the possibility of placing data centres in orbit. However, new analysis from Wood Mackenzie shows that the economics of space based data centres remain a significant barrier to large scale deployment.
According to the report, global data centre power demand is expected to increase from 460 TWh in 2026 to 1,280 TWh by 2030 and reach 3,700 TWh by 2040. This represents a 703% increase over current levels, with annual growth averaging 16%. The United States and China account for 78% of the global planned data centre development pipeline.
The surge in demand is placing mounting pressure on terrestrial infrastructure. Grid connection delays in the United States can extend to seven years, while gas turbine supply constraints are expected to persist through 2030. Water intensive cooling systems are also facing growing competition for scarce resources in arid regions, while rising labour and material costs continue to increase construction expenses.
These challenges are encouraging technology companies to investigate orbital alternatives, although the cost gap remains substantial.
Wood Mackenzie estimates that a hypothetical 1 GW orbital data centre would require investment of approximately US$170 billion, with launch and satellite related expenses accounting for around 60% of total project costs. The report finds that orbital facilities would need a 70% reduction in costs to achieve parity with ground based developments.
The outlook for lower launch costs remains promising. Global orbital launch attempts reached 324 in 2025, up 25% from the previous year, with commercial operators responsible for 70% of launches. Launch costs have fallen by around 90% compared with earlier expendable rocket systems, driven largely by the adoption of reusable launch technologies.
Satellite deployment also reached record levels in 2025, with 4,517 satellites placed into orbit, an increase of 58% year on year. Private companies owned 87% of these satellites, highlighting the growing commercialisation of the space sector.
SpaceX and xAI have unveiled plans to deploy 100 GW of orbital computing capacity annually, a figure that exceeds the combined announced capacity of all other orbital data centre developers by a factor of ten. Outside the United States, planned orbital data centre capacity remains limited, with non US companies accounting for less than 0.5 GW of announced projects.
Despite growing interest in orbital computing, investment continues to flow overwhelmingly into terrestrial infrastructure. Anthropic recently committed US$45 billion over three years to SpaceX for access to its 300 MW Colossus 1 data centre, which is equipped with 220,000 Nvidia GPUs.
Wood Mackenzie forecasts cumulative capital expenditure of US$9 trillion between 2026 and 2040 to deliver approximately 395 GW of new terrestrial data centre capacity under its base case scenario.
“The constraints on terrestrial data centres are genuine, and they are not going away quickly,” said Robert Liew, Research Director at Wood Mackenzie.
“But putting a data centre in orbit still costs at least three times as much as building one on the ground. That gap does not close without sustained and dramatic progress on launch costs. We forecast US$9 trillion of terrestrial data centre investment between now and 2040. That is where capital goes first. Orbital data centres are a serious long term proposition, but right now they remain a bet on the cost curve.”
Wood Mackenzie noted that its base case energy transition outlook does not currently include large scale orbital data centres. With no gigawatt scale orbital or terrestrial data centre yet in operation, the report concludes that terrestrial expansion will continue to dominate as operators race to meet soaring demand for AI driven computing capacity.
Author: Bryan Groenendaal
