In space, everyone can hear you stream: Challenges ahead of the corporate space data race
As the public debate over data centers heats up on planet Earth, companies are already considering launching them into orbit. SpaceX is on the front lines of this push, but it is far from the only company considering orbital compute and storage. Its record-breaking $85 billion initial public offering (IPO) demonstrates how much of the new space economy is now being driven by private companies rather than governments.
Such a shift raises a serious and unprecedented governance problem. If companies store and process data beyond national borders, who owns the data once it leaves Earth? Is it the company operating the infrastructure, the country where that company is headquartered, or investors who hold a large portion of that company’s value?
The data behind space data
The space economy has transformed since the first commercial communications satellite, Intelsat I, entered orbit in 1965. The mid-century space race pitted the United States against the Soviet Union—two diametrically opposed superpowers reaching for the stars to demonstrate their power on Earth. Today’s space race is defined by private innovators, who have demonstrated organic tissue printing and food cultivation in space, while exploring asteroid mining to take advantage of unique orbital conditions and resources. Cheaper launch costs, modern manufacturing techniques, and advanced robotics are lowering barriers to reaching orbit.
Orbital data centers may be a more nascent venture, but space offers a compelling opportunity to reduce some of the environmental and community impacts of terrestrial construction and operation. With growing concerns over impacts on power grids and water availability, space-based data centers could ease the burden on utilities and reduce local opposition.
SpaceX is just one of several companies exploring this technology, but it enjoys a clear advantage thanks to the scale of its Starlink constellation, which offers orbital computing power. Deploying and operating space-based data centers could cost seven to ten times more than their terrestrial counterparts—and vital cooling issues remain unresolved—but SpaceX could cut that premium by more than half by leveraging edge compute capacity across the Starlink fleet.
Ghost owners in the skies
American companies dominate this economy, but this preeminence may not last. Strategic competitors and emerging middle powers with deep pockets are building substantial leverage over US-launched space infrastructure and the data it could store. Complicated supply chain and financial ties raise difficult questions about who ultimately holds influence over the emerging space economy.
Chinese launch capabilities, satellites, and deep space networks are increasingly capturing market share—and are already having a terrestrial impact. China also holds a considerable share of “upstream” space supply chains through its state-owned mining, refining, and shipping monopolies.
When it comes to financing the global space economy, China isn’t the only player. Gulf investors reportedly anchored more than one-fifth of SpaceX’s IPO. Saudi Arabia’s Public Investment Fund (PIF), the Kuwait Investment Authority, the Qatar Investment Authority, Abu Dhabi’s MGX and Mubadala, and the Oman Investment Authority reportedly purchased IPO stakes estimated at $15 billion to $17 billion.
Gulf capital also reaches China’s space and technology firms. Saudi Aramco’s venture arm, Prosperity7 Ventures, raised $83 million for Chinese firm Orienspace. The PIF also reportedly has invested billions into Chinese private equity firms like HongShan (formerly Sequoia Capital China) and Hillhouse Capital, which have in turn invested widely in Chinese space companies.
Funding both sides of the corporate space race does not itself give Gulf investors explicit control over the infrastructure or its data, but it could position them to become data brokers to the stars. If a Gulf-backed company eventually builds an orbital network that routes data across a US-owned Starlink constellation and a Chinese-owned satellite mesh, for instance, it could become an important intermediary in how data moves. The physical location of the server would be irrelevant, and the data would be governed by an opaque corporate contract.
In such a cloudy and complicated system, determining who governs data and who has access to it could become considerably more difficult.
The void: missing legislation and international coordination
Part of the problem is that the legal architecture governing space was built for a different era. As the international space race was heating up, the United Nations adopted several measures in the 1967 Outer Space Treaty that (more or less) defined ownership of objects launched into space. In essence, governments bear responsibility for the satellites they (or their private companies) launch. The UN relied on launching states to work out ownership and governance of space infrastructure among themselves.
But space data is not launched. There is therefore no legal framework governing who owns it, how it is used, and where it goes.
While states may agree on data-sharing provisions through space—the EU’s General Data Protection Regulation (GDPR) has such guidelines—there is no framework that governs how data transfers across space systems owned and operated by corporations. Companies backed by sovereign wealth funds or quasi-state vehicles are serving multiple masters.
This becomes especially complicated with derived data. Axiom Space successfully launched its first dedicated orbital data center nodes in January 2026, and the startup Starcloud successfully trained the first large language model in space in late 2025. SpaceX is touting a plan to place one million artificial intelligence (AI) satellites in space in the coming years. As orbital computing becomes more capable, these AI models could generate altogether new insights.
It is not clear who owns the data these space-bound centers will process: Is it SpaceX, the sovereign wealth funds that invest in it, or the states they fly over? Without borders and legal frameworks, the skies could become a tax haven for data. Companies could use personal data to train models without clear legal oversight; both corporations and states could surveil human activities on a stellar scale.
What Washington should do now
These gaps leave policymakers with a narrowing window to set rules for orbital data before the technology scales.
- The executive branch should sharpen scrutiny of space investments: Nine US federal agencies are voting members of the Committee on Foreign Investment in the United States (CFIUS), led by the Department of the Treasury. CFIUS is tasked with assessing foreign investments in US companies for national security risks. These agencies should coordinate with the Department of Commerce’s Office of Space Commerce, US Space Command, National Reconnaissance Office, and other agencies to extend CFIUS reviews to US space companies and data partnerships. This could be part of a space data executive order, following the June order covering frontier AI models.
- Congress should write legislation that clearly protects American data: It is unlikely the Trump administration or Congress will push for robust data guidelines akin to the EU’s GDPR. However, both have a role in crafting legislation governing how American data outside US jurisdiction is stored, processed, and transferred. Separately, a careful review of whether SpaceX’s growing role in critical space infrastructure could constitute a defense-critical monopoly is long overdue.
- The State Department should shape international coordinating bodies for space data: While fora like the International Telecommunication Union exist to coordinate terrestrial data and AI issues, they are not yet addressing space data governance. This effort, however, relies on reinvigorating US participation in international fora after a period of intentional withdrawal. China, by contrast, has moved swiftly to secure seats on and shape the agendas of these international bodies.
- Civil society groups should press to protect data in transit: Unencrypted satellite transmissions expose sensitive data to interception. Data owners should demand advanced encryption protections and the option to opt out of space-based storage.
- Industry should strengthen shared collision-avoidance and characterization measures: With nearly 18,000 satellites in orbit, deconfliction standards and monitoring capabilities are necessary to preserve a safe operational environment.
- Industry and international fora should clarify liability and dispute-resolution frameworks: Fault attribution for risks like collisions and service disruptions largely depends on state-to-state mechanisms, under which the “launching state” is responsible for claims on behalf of companies. States should establish clearer domestic rules and arbitration mechanisms and demonstrate a willingness to defend firms in international disputes. Doing so could make these jurisdictions more attractive for investment and operations.
Will LaRivee is a nonresident fellow at the GeoTech Center, part of the Atlantic Council Technology Programs. He previously served as a strategic planner at Headquarters Air Force.
Matt Petit is a nonresident senior fellow with the GeoTech Center, part of the Atlantic Council Technology Programs. He also works at Vannevar, a US national security technology company.
The views expressed are solely those of the authors and do not necessarily reflect the views of the Atlantic Council.
The GeoTech Center champions positive paths forward that societies can pursue to ensure new technologies and data empower people, prosperity, and peace.
Further reading
Image: Satellites crossing the night sky above the northern Atacama Desert in Chile, over a period of just one hour. It is a stack of a time-lapse video taken on 15 October 2025, about two hours after sunset. A few streaks are caused by planes, and can be easily identified by their blinking and coloured lights, but most trails are due to satellites. (F. Kamphues, ESO/M. Kornmesser/Cover Images via Reuters Connect)