A Critical Moment for Europe’s Digital Future

Europe’s ambitions to lead in next-generation computing and space innovation face a decisive turning point. A new report warns that Europe Risks Falling Behind in the Space Data Center Race unless immediate action is taken to secure the continent’s place in what could become one of the most transformative industries of the century.

According to the European Space Policy Institute (ESPI), space-based data centers—vast platforms designed to power artificial intelligence using solar energy in orbit—represent a rapidly emerging market that could be worth more than €535 billion by 2030. Yet despite Europe’s strong technological base, analysts caution that without a coordinated plan, the continent may watch other global players seize the opportunity first.

A Growing Industry with Massive Potential

The ESPI report highlights a fast-accelerating global push toward deploying data centers in space. With 10,000 new near-Earth discoveries, rapid AI expansion, and rising demand for computing power, the race is already underway.

Lead author Jermaine Gutierrez warned:
“Europe has world-class space technologies and strong institutions… the question is whether we will use them to lead this revolution or watch others define the future of computing.”

Data centers form the backbone of global artificial intelligence systems. Today they are primarily based on Earth—massive facilities that require vast energy, water, and land resources. Moving some of these operations into orbit could relieve environmental pressures and dramatically reduce carbon emissions.

Why Space-Based Data Centers Matter

In 2024, the European Commission and aerospace company Thales conducted a major study into the feasibility of sending European data centers into orbit. Their findings were striking.

Environmental Benefits

Space-based data centers, powered entirely by solar energy, could sharply reduce greenhouse gas emissions associated with terrestrial operations. Unlike traditional facilities, they would not depend on water-intensive cooling systems, making them both greener and more resilient.

Strategic Autonomy

As competition intensifies, space-based architectures offer Europe greater sovereignty over the data that fuels its AI models—a key advantage in an era of geopolitical uncertainty.

Long-Term Economic Returns

Thales estimated that the investment could yield “several billion euros” in returns by 2050, making the venture not only technologically ambitious but financially attractive.

Europe Risks Falling Behind in the Space Data Center Race: What Must Be Done?

The ESPI report urges the EU to integrate space-based data centers into existing research and funding systems. Programmes like the In-Orbit Demonstration/In-Orbit Validation initiative and the European Space Agency’s General Technology Support Programme (GSTP) should serve as experimental platforms for testing new technologies.

In-Orbit Demonstration (IOD/IOV)

Supports companies by providing launch services and operational support, enabling real-world testing in orbit.

GSTP Programme

Transforms engineering concepts into tested, mission-ready technologies. ESA describes GSTP as “one of the best instruments to ensure Europe’s competitiveness,” crucial for staying ahead in global innovation.

The report also calls for a dedicated EU-wide initiative to outline how commercial deployment of space data centers should proceed over the next decade.

Major Challenges Ahead

Even with strong institutional support, Europe faces significant hurdles.

Launch Costs

SpaceX’s Falcon Heavy currently offers one of the lowest launch prices—around $1,500 per kilogram. But for space data centers to be economically viable, costs must fall to below $400 (about €346) per kilogram, ESPI notes.

Elon Musk has claimed that Starship could eventually deliver payloads for as little as $10 (€8.65) per kilogram, though this remains unproven. If Starship fails to meet expectations, the business case for orbital data centers weakens considerably.

Thermal Management

With no water for cooling in space, European companies must devise new systems to prevent overheating—one of the most difficult engineering barriers.

Maintenance in Orbit

Repairing and upgrading in-space infrastructure remains a major challenge, requiring autonomous systems or robotic servicing technologies that are still in early development.

 Charting Europe’s Path Forward

Turning Opportunity into Leadership

As Europe Risks Falling Behind in the Space Data Center Race, the report emphasises that the moment for action is now. The continent possesses advanced space technologies, strong industrial capacity, and world-leading research institutions. What it needs is a unified strategy to transform these strengths into global leadership.

If Europe can overcome the technical, financial, and logistical challenges ahead, it may yet shape the future of orbital computing. If not, the next revolution in digital infrastructure could unfold above Earth—without Europe at the forefront.