Davos 2026: 'The lowest-cost place to run AI data centres will be in space,' says Elon Musk

The future of artificial intelligence will be powered from orbit, according to Elon Musk, who says space-based solar energy and fully reusable rockets will drive a shift in how the world runs compute-intensive AI systems.

Speaking in a fireside chat with BlackRock Chairman and CEO Laurence D. Fink at the World Economic Forum in Davos, Musk said the biggest constraint on AI’s expansion is no longer chips, but power.

“The limiting factor is electrical power,” Musk said. “Very soon, we’ll be producing more chips than we can power.”

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While AI chip production is growing, Musk warned that electricity generation is increasing at only 4-5% a year, creating a looming bottleneck for data centres worldwide.

He pointed to solar as the only energy source capable of scaling fast enough to support the AI revolution. “Solar is now the biggest energy source in the world,” Musk said. “Ultimately, nearly all energy comes from the sun.”

China, he said, is already deploying solar at unprecedented scale. “China is deploying over 1,000 gigawatts of solar per year,” he said.

But Musk believes the real breakthrough will come from space.

“Solar power in space is five times more efficient than on Earth. It’s always sunny, no weather, no night cycle, and cooling is effortless,” he said. “The lowest-cost place to run AI data centres will be in space, within two to three years.”

The shift is being enabled by full rocket reusability, a long-standing goal of SpaceX. “When you achieve full reusability, the cost of space access drops by a factor of 100,” Musk said. “Starship will make space access cheaper than air freight.”

Musk said SpaceX is already preparing to deploy solar-powered AI satellites. “Space is the ultimate power source.”

Watch the full interaction here