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Wency Chen

In 1957, the Soviet Union kicked off the Cold War’s space race, shocking the world by sending Sputnik, the world’s first artificial satellite, into orbit.
Four years later, it did the same to cosmonaut Yuri Gagarin, making him the first human in space. In 1969, the US provided another image that defined the era: Neil Armstrong leaving the Eagle lunar lander and planting the American flag on the moon, declaring it “one small step for man, one giant leap for mankind.”
For the two superpowers, the space race was an ideological contest measured in firsts – with each milestone setting down a marker for technological know-how, national pride and a renewed commitment to push beyond the bounds of Earth.
Half a century later, a new space race is taking shape, with China emerging as one of the leading actors.
However, this competition is about more than symbolic firsts. Countries are seeking to make the technological achievements necessary to occupy, operate and utilise space, creating a new layer of digital infrastructure through satellites, networks, sensors and computing systems.
SpaceX, the US tech giant gearing up for what is expected to be the world’s biggest initial public offering as early as next month, has become a major player in this contest, releasing plans for orbital data centres, an experimental technology that is nonetheless sending ripples through global supply chains by driving demand for base metals, chips, satellites and rockets.
China, nurturing its own commercial space sector, is racing to keep up. Industry insiders and analysts based in the country said space was the new battlefield for technological competition, and Beijing could not afford a strategic absence.
“Talking too much about ‘the first’ is meaningless in a truly innovative context,” said Wang Jian, an academician at the Chinese Academy of Engineering, adding he wanted the country to “send computing power and AI into space”.
Wang, a founder of Alibaba Cloud, helped build China’s cloud computing industry. He now leads a research institute backed by Zhejiang’s provincial government, known as Zhejiang Lab. Its flagship Three-Body Computing Constellation project aims to build a thousand-satellite network for space computing.


Calculating beyond the clouds
“Space computing refers to shifting computing capability into orbit,” said Lin Guangrong, constellation communications systems architect at Chinese satellite maker GalaxySpace. “[It lets] satellites and spacecraft perform sensing, processing and data transmission directly in space.”
The ultimate vision is “space-based primary computing” – data centres that float in a layer above the actual clouds – according to China’s Academy of Information and Communications Technology, a think tank affiliated with the Ministry of Industry and Information Technology.
For decades, the aerospace industry operated under a standard procedure: sense in space, compute on Earth. Satellites were merely orbital cameras and mirrors, capturing raw data and waiting for a designated “downlink window” to beam it to a terrestrial ground station.
But a paradigm shift is under way, accelerated by rapid changes in the terrestrial economy and their attendant challenges.
On Earth, there are fears the boom in artificial intelligence data centres – described by Nvidia CEO Jensen Huang as “the largest infrastructure buildout in human history” – could run into crippling physical constraints such as land shortages, strained power grids and access to the water required for cooling.
“Current advances in AI are dependent on large terrestrial data centres,” wrote SpaceX CEO Elon Musk in a February memo announcing SpaceX’s acquisition of xAI. “In the long term, space-based AI is obviously the only way to scale.”
Tech leaders have begun to make the case for moving heavy AI workloads into orbit – where solar energy is abundant and the vacuum of space, in theory, would provide unlimited coolant – arguing it is the only sustainable way to ease the compounding infrastructure pressures on Earth’s ecosystems.
But more immediately, space computing would serve as a boon for data preservation – a wide-ranging benefit.
“As the number of satellites in orbit continues to grow alongside mission density, the volume of space data is rising rapidly,” Lin said.
Wang said about 90 per cent of remote-sensing satellite data was discarded in space because Earth-based networks could not handle the sheer volume of information.
That could result in delays and, sometimes, missed signals. Information about floods, wildfires, ship movements or cosmic ray bursts lasting only seconds could lose much of its value by requiring a downlink window before being analysed on Earth.

The race begins
China entered the space race relatively late. Its first satellite, Dongfanghong 1, lifted off from Jiuquan in 1970 and broadcast the revolutionary song “The East Is Red” from orbit.
“From the perspective of technological competition, China cannot afford a strategic absence,” said Mi Lei, founder of CAS Star, a venture capital firm backed by the Chinese Academy of Sciences whose portfolio spans low-Earth-orbit communications, launch companies and satellite makers.
“Space is too important. In the new round of technological competition, a country has to be good at everything.”
While China does not face the same severe electricity and land constraints limiting the US capacity for data centre construction, it wants a central role in the next race.
Its advantage lies in its ability to fully mobilise a centralised industrial system – uniting components, satellites, rockets, launch sites, measurement systems, applications and a manufacturing base – under state command, according to a recent report by a research institute affiliated with the information technology ministry.
That holistic ecosystem allows China to bypass some of the fragmented commercial inefficiencies that can plague Western tech deployment.
Chinese authorities have voiced their support for space-based computing, sending a clear signal for capital and industry players. At a news conference last month, an official from the ministry said China would “support forward-looking research into space computing technologies and promote the orderly development of the space-computing industry”.
In the blueprint for the latest five-year plan, which runs through 2030, the commercial space sector was listed as one of 10 new industries and growth areas China would nurture and develop, as Beijing for the first time included the goal of becoming a “space power” among its national “strong country” objectives.
Against that backdrop, new research labs and companies are emerging.
The Three-Body Computing Constellation, designed to solve space’s data problem in space with AI, successfully launched an initial batch of 12 computing satellites in May last year. It is aiming for 100 next year and is equipping each spacecraft with an onboard computing unit capable of delivering up to 744 trillion operations a second.
Zhejiang Lab said in February it had deployed 10 AI models in orbit, including a remote-sensing model, an astronomical time-domain model, and a Qwen large language model from Alibaba Group Holding, owner of the South China Morning Post. Several of the models can be updated while in orbit.
In one recent experiment, satellites equipped with cosmic ray detectors used a space-based astronomical model to rapidly identify and classify gamma-ray bursts.
Zhejiang Lab also established in-orbit network links between six satellites this year, marking a significant step towards inter-satellite networking.
“The field is still in an early phase of exploration and technical validation,” said Lin of GalaxySpace.




The US’ head start
The most immediate hurdle facing China’s ambition is the infrastructure required to get orbiting computers into the sky efficiently – an area where the US holds a long-standing advantage.
Driven by tech titans with deep pockets, the American aerospace industry has made strides in high-frequency, low-cost reusable rockets.
SpaceX completed roughly 165 orbital launches last year, with that rapid-fire capability enabling the construction of Starlink – a fully functioning global broadband low-Earth-orbit network with over 10,000 satellites.
Musk’s company is now leveraging that dominance, seeking US regulatory approval for a constellation of up to 1 million solar-powered satellites engineered specifically as orbital data centres. Such a massive fleet would solidify America’s architectural dominance over the lower atmosphere.
China, however, has yet to master high-frequency, SpaceX-style reusable rocket technology.
While its Qianfan and Guowang megaconstellation plans are ambitious, each has only launched a few hundred satellites so far.
Compounding the hardware gap is the nature of the competition itself. Beijing is primarily relying on state-directed labs, targeted pilot programmes, and a still-maturing commercial space industry, while Washington’s space computing push is being propelled by an aggressive, cash-rich alliance of private AI and chip giants.
Google is advancing its Project Suncatcher, a moon-shot effort to link solar-powered satellites equipped with its proprietary Tensor Processing Units in an orbital AI cloud.
AI start-up Anthropic struck a deal with SpaceX this month to use the latter’s Colossus 1 data centre, while signalling interest in a broader partnership to develop gigawatt-scale AI computational processing power in orbit.
Nvidia, meanwhile, unveiled a Space-1 Vera Rubin module at its GTC conference in March, describing it as part of a new accelerated computing platform for space applications. The company has already placed an H100 graphics processing unit in orbit on a satellite launched by Starcloud, a start-up it backs.


Humbled by physics
Yet both sides must confront the laws of physics, which favour no superpower.
“To make space computing work at scale, onboard computing, inter-satellite links, space-ground integration and thermal management all have to move forward together,” Lin said.
High-power computing units generate massive amounts of heat, but cooling is an issue in such a brutal environment. While space is cold, it is also a vacuum – meaning there is no air for convection.
Instead, heat must be laboriously conducted through the structural body of the spacecraft and radiated away through large thermal panels, making high-power space computing a heavy, complicated and expensive thermodynamic challenge.
Then comes the power paradox. Running trillions of operations per second requires immense energy, forcing engineers to develop lightweight, foldable, radiation-resistant solar arrays that must constantly balance thermal design with spacecraft orientation.
It is a systems-level conundrum, and no current solar cell has presented a clear solution. Every material choice involves severe trade-offs between weight, flexibility, lifespan and radiation tolerance.
To combat these challenges, industry players like GalaxySpace have not only poured capital into mass production of synthetic aperture radar satellites, but also into complex pumped fluid-loop thermal management systems and advanced flexible solar arrays.
According to a paper written by Google researchers, the engineering hurdles also encompass high-bandwidth inter-satellite laser communications, radiation-hardened components and long-term hardware reliability in an environment hostile to delicate silicon.
Google’s researchers were not as positive as Musk, who frames orbital data centres as a near-term possibility. They said the cost of launching and operating a space-based data centre would not become economically comparable to terrestrial infrastructure until the mid-2030s, assuming launch prices fall below US$200 per kg.
To put that into perspective, SpaceX says its Falcon 9 can send up to 22,800kg (50,265 pounds) into low-Earth orbit, and with each launch reported to cost about US$74 million, that implies a full-capacity launch cost of roughly US$3,245 per kg.


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China could be a leading player in the new technological battlefield, but the US has a substantial lead in essential tools such as reusable rockets


China could be a leading player in the new technological battlefield, but the US has a substantial lead in essential tools such as reusable rockets.


A cloud above the clouds: US, China race to make space a computing platform

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}China could be a leading player in the new technological battlefield, but the US has a substantial lead in essential tools such as reusable rockets

China could be a leading player in the new technological battlefield, but the US has a substantial lead in essential tools such as reusable rockets