AWS chief skeptical of AI data centers in space after Musk’s push

Amazon Web Services CEO Matt Garman expressed skepticism about space-based data centers at a conference in San Francisco.

He cited high transportation costs and the lack of permanent structures in space.

Garman said current data centers are large and heavy, built on reinforced concrete, which makes space deployment difficult.

He stressed that transporting equipment into space remains expensive.

His comments came after Elon Musk spoke about using satellites and space infrastructure for AI and data storage, including Starlink.

Musk recently merged SpaceX with his AI company xAI, valued at US$1.2 billion, and pointed to advances that could reduce costs.

🔗 Source: Fortune

🧠 Food for thought

Implications, context, and why it matters.

Reports put the combined SpaceX and xAI valuation near $1.25 trillion, not $1.2 billion 1.
SpaceX filed with the Federal Communications Commission (FCC), the US agency that regulates telecommunications and satellite spectrum, for a 1 million-satellite constellation meant to run as orbital data centers 2.
Elon Musk said the system could become the “lowest cost way to generate AI compute” within two to three years 3.
xAI has heavy cash needs and told investors it burned about $9.5 billion through the first nine months of 2025 4.
Musk also said a combined structure could make fundraising easier, including by drawing on investor interest ahead of a potential SpaceX IPO (initial public offering) 4.

The AWS CEO has focused on lowering AI costs, while competitors weigh bigger infrastructure bets.
Musk and some analysts frame the SpaceX-xAI tie-up as vertical integration across the AI stack, from launch vehicles and satellites to compute infrastructure under one owner 1.
Amazon could face a rival that competes on models and also controls launch and satellite capacity for data processing 1.
Amazon is building a satellite effort called Amazon Leo, while Musk leans on SpaceX’s launch cadence and the Starlink footprint to push into space-based processing 4.
This direction nudges large tech firms toward longer-range planning for off-planet infrastructure, widening the arena for AI infrastructure competition 3.