Nvidia CEO says the economics of space data centers are 'poor right now,' but will improve

• Jensen Huang said it's difficult to put data centers in space right now.
• But the Nvidia CEO said "the economics" will improve over time.
• Some big names in tech, including Elon Musk and Sundar Pichai, are planning orbital data centers.

Nvidia CEO Jensen Huang has a message on the possibility of orbital data centers: Watch this space.

"The economics are poor today, but it's going to improve over time," Huang said during Nvidia's fourth quarter earnings call.

Huang's tempered optimism is a stark contrast to the views of OpenAI CEO Sam Altman, who has dismissed his onetime ally, Elon Musk, for his zealous pursuit of putting data centers in space.

"I honestly think the idea with the current landscape of putting data centers in space is ridiculous," Altman recently said.

Huang pointed out some of the virtues of building the massive data centers needed to power AI in space, including the surplus of well, space.

"As you know, the way that space works is radically different than how it works down here," he said. "There's an abundance of energy. But solar panels are large, but there's plenty of space in space."

Data centers are increasingly becoming a political football back on earth, fueling some of the push to look toward space.

AI and tech companies are facing pressure to reduce the vast number of resources they draw on to power and cool data centers, or to simply build the supplies themselves. Companies have already begun exploring ways to build their own power sources, though many will rely on fossil fuels despite their clean energy commitments.

Tech leaders have also bristled at the sometimes lengthy approval process needed for their power plans. For example, licensing a nuclear reactor can take years, though Trump has pushed to shorten that timeline. In the meantime, Meta, Microsoft, and Amazon are all pursuing deals to secure nuclear power.

Musk's xAI is already finding ways to build on-site power with the use of unpermitted mobile generators to get the company's massive data centers up and running in Tennessee and Mississippi.

Altman previously said he's bearish on orbital data centers "this decade" because of the high launch costs and the difficulty of repairing chips in space.

"We are not there yet," he said. "There will come a time. Space is great for a lot of things. Orbital data centers are not something that's going to matter at scale this decade."

Musk isn't alone in pursuing the idea. Google CEO Sundar Pichai recently told Fox News that the search giant could start putting data centers in space as soon as next year.

Musk's push for data centers coincided with SpaceX's acquisition of xAI, which came as xAI needed cash to continue its data center buildout. (SpaceX is already hiring to make Musk's vision a reality.)

"My prediction is that it will be by far the cheapest place to put AI," Musk said during a recent podcast appearance. "It will be space in 36 months or less. Maybe 30 months."