Elon Musk has suggested moving AI data centers into orbit as Democratic election victories intensify debate over America's computing infrastructure. The proposal comes amid falling AI infrastructure stocks and opposition to energy-intensive facilities.
Democrats secured control of both congressional chambers in Tuesday's midterm elections, increasing expectations of stricter oversight of data center development.
CNBC reported that Gina Hinojosa's projected victory in Texas added uncertainty because she supports a moratorium on AI data centers. Wells Fargo estimates Texas represents 27% of planned American data center power capacity.
Ahead of Wednesday's opening bell, CoreWeave declined approximately 3.3%, Applied Digital lost 3%, and IREN fell 4.3%. CoreWeave, Cipher Digital, IREN and Nebius have fallen nearly 50% to 60% from their respective highs, reflecting concerns about borrowing, spending and investment returns.
“Data centers in space looking pretty appealing right now,” Musk wrote on X following the election results. Investor Chamath Palihapitiya highlighted opportunities in space infrastructure. According to his research, private investment in space hardware increased from approximately USD 500 million in 2012 to USD 17 billion in 2025.
SpaceX has requested permission from the Federal Communications Commission to deploy as many as one million solar-powered satellites serving as orbital data centers. Musk believes orbital AI computing could become cheaper within 30 to 36 months.
Senator Bernie Sanders and Representative Alexandria Ocasio-Cortez introduced the Artificial Intelligence Data Center Moratorium Act in March, proposing a construction pause pending national safeguards.
President Donald Trump opposes restrictions, arguing they could weaken American technological competitiveness. House Speaker Mike Johnson warned, “We cannot have a moratorium on the development of AI.” Meanwhile, New York introduced a one-year pause on permits for new hyperscale facilities.
Musk's xAI operates two Colossus supercomputers in Memphis and has acquired another Mississippi site, potentially expanding capacity to two gigawatts. A separate Colossus 2 expansion filing totals USD 659 million.
Despite infrastructure concerns, technology futures gained 0.3% before Wednesday's session, while Bitcoin traded above USD 78,000. Orbital computing remains speculative, facing launch costs, cooling challenges and regulatory hurdles.
Also Read: Why Tech Giants Are Shifting Computing Power to Massive Data Centres