Could SpaceX’s orbital compute avoid the political headwinds facing data centers?

Evercore ISI analysts have noted that mounting political opposition to data centers is becoming increasingly bipartisan. Texas has paused up to 1,800 projects awaiting audits, while Pennsylvania has withheld permits until developers obtain all necessary local approvals. Surveys indicate that 75% of Americans would oppose a data center built near their community, up from 42% a year ago.

Evercore considers this an imminent risk heading into the midterms, expecting both parties to vocalize their opposition. They anticipate potential negative headlines for the AI industry as a result.

In contrast to the terrestrial data center landscape, Evercore believes SpaceX's plans for orbital compute stand out favorably. The company screens well against the tests states are implementing, generating power on-site and committing to fund grid upgrades for households rather than imposing costs on them. While Evercore notes that SpaceX may still encounter permitting, emissions, and environmental-justice opposition as seen in Southaven, the advantages of orbital compute are perceived as relative rather than absolute.

The analysts argue that if SpaceX successfully realizes orbital compute, it could gain a significant edge in terms of cost and speed to market. Crucially, this would allow the company to sidestep the political pressures surrounding terrestrial compute altogether. Evercore estimates that terrestrial capacity may not even be required beyond 2029 if SpaceX's orbital compute venture proves successful.