Amazon Web Services CEO Says Space-Based Data Centers 'Not Economical' Despite Jeff Bezos Pursuing The Idea

On Tuesday, Amazon.com, Inc. (NASDAQ:AMZN) Web Services CEO Matt Garman said the idea of putting data centers in space remains impractical and uneconomical.

AI Boom Is Pushing Limits Of Earth-Based Data Centers

The rapid expansion of artificial intelligence is driving unprecedented demand for computing power, electricity and cooling, pushing cloud providers to the limits of traditional, land-based data centers.

Those pressures have sparked interest across the tech industry in unconventional alternatives, including deploying data centers in orbit, where solar energy is abundant and cooling challenges could be reduced.

However, the AWS CEO made it clear that such ideas remain firmly in the realm of long-term speculation.

Speaking at the Cisco AI Summit in San Francisco, Garman said the physical and economic realities of building infrastructure in space make the concept far from viable today.

‘There Are Not Enough Rockets,' Says AWS CEO

Garman acknowledged the theoretical appeal of space-based data centers, citing advantages like continuous solar power and easier cooling.

However, he stressed that the logistics of getting heavy equipment into orbit are a major obstacle.

"If you think about the cost of getting a payload into space today, it's massive," Garman said. "It is just not economical."

He noted that server racks can weigh around a thousand pounds and pointed out that humanity has yet to build permanent, large-scale structures in space.

"There are not enough rockets to launch a million satellites yet," he added, calling space data centers "pretty far" from becoming reality.

Transport Costs Are The Biggest Bottleneck

According to Garman, the core constraint is not computing technology but transportation.

The limited availability and high cost of rocket launches make scaling any kind of orbital data center infeasible for now.

While companies like Blue Origin — founded by Amazon founder Jeff Bezos — are working to reduce challenges faced by traditional data centers, Garman said prices would need to fall dramatically before space-based infrastructure makes economic sense.

"That is the bottleneck today," he said, referring to the challenge of simply getting hardware into space.

Industry Split On Space-Based AI Infrastructure

Interest in orbital data centers is growing across the tech sector. Elon Musk has argued that future AI demand could overwhelm terrestrial power supplies.

Sundar Pichai-led Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) also has early-stage plans to test orbital data center concepts.

Price Action: Amazon shares closed Tuesday at $238.62, down 1.79% with the stock slipping another 0.071% to $238.45 in after-hours trading, according to Benzinga Pro.

Amazon shares rank highly for Quality in Benzinga's Edge Stock Rankings and show a favorable price trend across the short, medium and long term.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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