Morgan Stanley researchers highlight that the next phase of the artificial intelligence boom may extend into space, specifically through orbital computing. This concept involves creating virtual data centers in orbit, which could alleviate the constraints faced by land-based AI data centers.
Key factors contributing to this shift include decreasing launch costs, improvements in optical satellite networking, and the increasing volume of data generated in space.
Analyst Shawn Kim notes that while orbital computing is not expected to replace terrestrial data centers in the immediate future, there is a promising near-term opportunity in orbital edge-AI, where satellites can process data in space before transmitting it back to Earth.
Jonathan Siegmann from Stifel Financial emphasizes that investing in space technology is now a viable opportunity, as commercial space ventures gain traction. The reusable launch model pioneered by SpaceX has significantly reduced costs and facilitated the development of scalable networks.
Morgan Stanley identifies 43 companies involved in the orbital compute supply chain, with major players like Nvidia, Broadcom, Micron Technology, and Advanced Micro Devices leading the U.S. market. Additionally, companies in Asia and Europe are also crucial to this supply chain, providing essential hardware for space-based computing.
This emerging sector not only represents a frontier in technology but also aligns with national security and commercial interests, making it an area of keen interest for investors