China also wants to build data centers in space.

The Chinese government quietly approved the Space Computing Industry Innovation Center in early June, aimed at bringing together rocket and satellite manufacturers, semiconductor fabricators, and artificial intelligence technology companies to jointly build a space computing network. According to Beijing's government statement, this initiative aims to "connect the entire space computing industry chain and promote the development of satellite Internet of Things (IoT) sectors." Research company SemiAnalysis stated on platform X that China took this action one week before Elon Musk announced his AI1 satellite, which will run artificial intelligence workloads in space orbit.

The center is scheduled to officially launch later this month and will focus on six major research areas: highly reliable, heat-resistant space-native computing chips; high-performance ultra-interconnected space computing payloads; space computing satellite platforms and standardized systems; large-scale models for space under power-constrained conditions; integrated space-ground-cloud measurement and control networks; and service-oriented and tokenized operations of space computing power. These research and development efforts aim to build an orbital artificial intelligence data center that does not depend on Earth's energy and is not constrained by the bottlenecks currently limiting terrestrial data center development.

People have been discussing Elon Musk's AI1 satellite all week. Few have noticed: China's initiatives in space artificial intelligence computing came a week earlier. Last week, Beijing quietly launched its first Space Computing Industry Innovation Center, backed by the government and led by top domestic university Beijing University of Posts and Telecommunications (BUPT).

Although Beijing announced this earlier than Musk's AI1 disclosure, it should be noted that Elon has already provided technical details in interviews. In fact, the world's first trillionaire has been discussing space computing since November of last year and submitted an application to the U.S. Federal Communications Commission (FCC) in February 2026 for an orbital data center system containing one million satellites. Jeff Bezos has also entered the competition, launching "Project Sunrise" with 51,600 satellites, which will operate in sun-synchronous orbit.

What differs in China's announcement, however, is that it brings multiple companies together to build a system. By contrast, SpaceX and Blue Origin are each pursuing independent efforts—these two companies are competitors and do not appear to be collaborating on developing the technologies needed for space artificial intelligence computing. SpaceX even appears to intend to achieve vertical integration through its newly built 11 million square foot GigaSat factory and Musk's TeraFab mega-project.

We cannot predict which approach will prove more effective over the long term: whether one or two companies investing substantial resources in this mega-project (with success or failure borne entirely by themselves), or multiple smaller companies and institutions collaborating to build a space intelligent computing research center whose outputs could benefit Chinese enterprises broadly. But one thing is clear: Beijing is serious enough about space data centers to commit resources to this effort—a significant move for a country with abundant electricity and sufficient infrastructure to build power-intensive data centers.

Google is reportedly in talks with SpaceX to launch its orbital data center. SpaceX has unveiled its 11 million square foot Gigasat factory, a new space data center manufacturing facility. Elon Musk's first-generation orbital data center spacecraft is wider than a Boeing 747 and carries interchangeable chip payloads.