The first two months of 2026 have quietly redefined what a data centre looks like. SpaceX, Starcloud, and Jeff Bezos' Blue Oridin have all filed plans with FCC to put up millions of satellites in space,
proposing to operate them as solar-powered orbital data centres designed to "accommodate the explosive growth of data demands driven by AI." All of these filings come with only one message - the cloud is literally going to the clouds.
These filings indicate that data centres of the future, are now going to the clouds, but India has been pushing for data centre expansion on the ground. With global tech leaders now aiming for space, is India's data centre hub vision a far-fetched dream? Industry analysts are divided on this matter.
Data centres will create jobs
Faisal Kawoosa, Tech Analyst and Founder at TechArc, offers a pointed assessment. "Data centre push is good because it is a long-term commitment. You cannot just tomorrow decide to wind it up. Unlike electronics manufacturing where companies can assemble phones in India and anytime wind up and go to any other country, data centres are physical infrastructure. That way, I think it is good that we are building up data centres," he told the Free Press Journal.
But Kawoosa is candid about the ceiling of this ambition, "From a technology point of view, we are not gaining anything. We are just providing infrastructure. It is more of a real estate game than doing something very core in the technology. It will help us build some more buildings, it will create some jobs, but it does not up our game in the technology value chain per se."
He also flags a larger macro trend. "There are three or four blocks in the world where companies have been considering data centres. One is, of course, the US, which is now getting saturated."
That saturation is precisely why eyes, and satellites, are turning upward.
Data centres in space 'not an immediate threat'
Parv Sharma, Senior Analyst at Counterpoint Research, believes the space data centre narrative, while real, is not an immediate threat to India's ground-level ambitions.
"India's data centre capacity is projected to grow from approximately 1.5 GW today to between 8–10 GW by 2030. Despite generating nearly 20 percent of global data, India currently hosts only about 6 percent of global capacity," he tells the Free Press Journal. "Space data centres are designed to solve specific problems and will not replace the need for ground-based infrastructure."
Sharma explains that orbital centres offer compelling physics, efficient solar energy harvesting and radiative cooling in the vacuum, but poor economics at scale compared to terrestrial alternatives. "Initially, they may serve as Edge AI for on-orbit processing, reducing the need to beam raw data to Earth," he says.
"The Indian government's current policy supports 'Sovereign AI' with a focus on local data centres, incentivised by a tax holiday until 2047. While India has the capacity to launch data centre satellites via ISRO, this remains a longer-term ambition."
Space Data centre ambitions 'far from reality'
This view finds support in critical analysis from within the space industry itself. Following SpaceX's FCC filing, AWS CEO Matt Garman immediately countered, labelling the plan "far from reality" and economically unfeasible. Even SpaceX acknowledged the uncertainty by requesting a waiver of FCC milestone requirements that typically require half a constellation to be deployed within six years of authorisation - without providing a deployment schedule or cost estimate.
India's ground game is strong for now
Back on Earth, India's data centre story looks strong. More than 5 GW of additional IT load capacity is expected to be operational in India by 2030, and the country is on track to become the second-largest data centre electricity consumer in the Asia-Pacific region. Nomura's projections see capacity soaring to 9.2 GW by 2030, while absorption hit 427 MW in 2025, eclipsing the 407 MW recorded in 2024.
Microsoft's $17.5 billion commitment and Google's $15 billion partnership with Adani are shifting India's data centre market from lease-heavy to ownership-heavy models, signalling long-term structural conviction in ground-based infrastructure. The market was valued at $5.38 billion in 2024 and is projected to surge to $17.61 billion by 2030 at a CAGR of 20.54%.
That is a lot of concrete, fibre, and GPU racks being laid into Indian soil.
The verdict: Build now, watch the skies later
For India, the calculus is relatively clear in the near term. The country's sovereign data localisation requirements, the latency needs of its 700 million internet users, the IndiaAI Mission's GPU ambitions, and the sheer scale of digital adoption - from UPI to healthcare to fintech - make a strong case for terrestrial infrastructure as the backbone for at least the next decade.
Google predicted that launching data centres to space will become cheaper than terrestrial operations only by 2035, and only assuming Starship achieves reliable reusability. The orbital data centre market, currently valued at approximately $1.77 billion by 2029, tracks toward $39.09 billion by 2035 at a 67.4 percent CAGR - impressive, but still a fraction of what terrestrial markets will absorb by then.
The risk for India is not that space data centres will make its ground-level investment obsolete overnight. The risk is more subtle: that it remains a provider of physical infrastructure rather than a master of the intelligence layer sitting above it. As Kawoosa puts it, if India is playing a real estate game while the rest of the world races toward computing sovereignty in orbit, the data centre boom may be more foundation than frontier.
