After Democratic Wave, Data Center Backers Look to Space

A wave of Democratic candidates won state and congressional races across the country on Tuesday, including many who voiced opposition to the data center industry-notably in Texas, a national data center hotspot and home to Elon Musk's SpaceX. The results have sent some corners of the tech industry looking to the heavens for answers.

In recent hours, data center enthusiasts have proclaimed on social media that they're still "bullish" on building data centers-just not necessarily in Texas, or even on Earth at all. Instead, they say, it's time to focus on data centers in space.

Elon Musk-who sank more than $400 million of his fortune supporting Republican candidates who all went on to lose their midterms races-has been among those leading the charge. "Data centers in space looking pretty appealing right now," Musk posted on X in the early hours of Wednesday, after it was clear that Democrats had taken the House and Senate. Throughout the day, Musk employees, tech investors, AI researchers, venture capitalists, and industry fans joined the chorus of support for space-based data centers.

Some companies are already trying to put compute in orbit. Among them are Google, which launched a satellite that it says contains "data center class TPU," and SpaceX, which says it aims to deploy "thousands of AI satellites starting as soon as late 2027." Blue Origin has filed for a Federal Communications Commission permit to launch 50,000 satellites that will constitute an "orbital data center system." Startup Starcloud claims to have carried "the first NVIDIA H100 GPU into orbit" in November 2025.

Despite being technically possible, the realities of in-orbit data centers are difficult. Among other things, space-based data centers are much more expensive than land-based ones, can't grow to hyperscale size, and are subject to the risks and whims of satellite launches.

When it comes to Texas data centers, the concerns of tech backers aren't completely unfounded. Experts tell WIRED that the change in leadership could translate to some concrete changes in the industry-albeit with limits. Although Democrats have control of the Texas House, Republicans still have control over the state's senate. Robert Paterson, professor of land use and environmental planning at the University of Texas at Austin, tells WIRED that the split means that some immediate attempts at change "will probably be stymied a bit."

Adrian Shelley, director of nonprofit consumer advocacy group Public Citizen's Texas office, tells WIRED that the legislature would be a likely place to hash out high-impact policies like the reallocation of state agency resources. However, he adds that the governor could effect more immediate changes by issuing executive orders, or requesting the resignation of politically appointed officials in state agencies. Shelley says that these oversight agencies-such as the Texas Commission on Environmental Quality, the Public Utility Commission, and the Texas Water Development Board-have the authority to charge fines for breaking state law, or in extreme cases, to revoke permits for projects like data centers. But Paterson notes that Texas developers have particularly strong "vested rights," which protects the terms of their projects from the moment their permits are approved, even if construction hasn't begun yet.

Another medium-term route to reshaping Texas's data center industry could be giving more power to its counties. Paterson noted that nearly half of the state's data centers exist in unincorporated territory, which puts them outside the jurisdiction of city zoning laws. Unlike other states, Paterson says, Texas counties have relatively limited enforcement abilities. Under the state's so-called Dillon's Rule, counties only have powers that are "specifically allotted to it by the state." So while they have authority over things like access and egress to county roads, or construction on floodplains, he says they don't have the zoning authority that would help closely regulate projects like data centers.

Paterson says that the new attorney general could theoretically adjust the terms in the state's biannual handbook, which establishes the limits of county authority. He also argues that even in a split legislature, especially since anti-data center sentiment crosses party lines, state lawmakers could propose a viable bill giving counties "limited zoning authority over data centers."

Shelley tells WIRED that since "data centers were a decisive factor in this blue wave," the upcoming legislative season will be "very interesting." "I will say the data center industry hasn't shown a lot of interest in working with state lawmakers or local leaders," Shelley says, "and I will be interested to see if that changes." If not, there's always low-Earth orbit.

Source: Wired