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Space Data Centers: Google, Amazon, and Meta Poised for Orbital Testing

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Nexo Partners with Bakkt for US Crypto Exchange and Yield Programs

Key Takeaways

  • Launch costs need to plummet to under $300/kg from current rates of $1,500–$3,600/kg before space-based data centers become economically feasible
  • Building a 1-GW orbital facility would exceed $100B at today’s prices, compared to $35B–$50B for terrestrial alternatives
  • BNP Paribas predicts Google, Amazon, and Meta will conduct initial pilot programs once economic barriers decrease
  • Elon Musk projects space will become the “most economically compelling” location for AI infrastructure in 30–36 months
  • Starcloud, backed by Nvidia, successfully deployed the first Nvidia H100 GPU to orbit in November 2025

Orbital data centers are transitioning from speculative concept to serious strategic consideration. A recent analysis from investment bank BNP Paribas explores this emerging possibility, though the firm concludes current economics remain prohibitive.

With present-day launch expenses ranging from $1,500 to $3,600 per kilogram, constructing a 1-gigawatt space-based data center would exceed $100 billion in total costs. By comparison, an equivalent terrestrial installation runs between $35 billion and $50 billion.

According to BNP analyst Nick Jones, the bank considers orbital data centers unfeasible as a “viable near- to medium-term solution.” Jones pointed to prohibitive launch expenses, costly space-rated components, and complex challenges surrounding thermal management and power systems in the vacuum of space.

BNP’s analysis indicates that launch costs must decrease below $300 per kilogram for the concept to achieve economic feasibility. This represents a substantial reduction from current market rates.

Should costs reach that threshold, BNP anticipates Google, Amazon, and Meta will be positioned as frontrunners to conduct preliminary proof-of-concept trials with orbital computing platforms. The bank’s report did not specify a projected timeframe for this development.

The Energy Challenge Driving Space Solutions

The motivation for orbital infrastructure stems largely from AI’s escalating power requirements. Terrestrial data centers are consuming electricity at unprecedented levels. According to Department of Energy figures, US data centers represented approximately 4.4% of the nation’s total electricity usage as of 2023.

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McKinsey projects that satisfying global data center demand through 2030 will necessitate $6.7 trillion in infrastructure investment. Technology sector capital expenditures are forecast to reach $600 billion in 2026, with Amazon alone committing $200 billion to expansion.

Elon Musk has positioned space-based computing as central to SpaceX’s long-term vision. He’s projected that within 30 to 36 months, orbital environments will become the “most economically compelling place” for AI computing infrastructure. SpaceX aims to deploy a constellation comprising one million satellites functioning as orbital data centers, each producing approximately 100 kilowatts of computational capacity per ton.

Musk’s rationale centers less on operational cost savings and more on energy accessibility. He’s highlighted that electrical generation outside China has remained essentially stagnant, creating uncertainty about power sourcing for new terrestrial data center development.

SpaceX Advances Beyond Planning Phase

SpaceX has progressed from conceptual discussions to active recruitment. Michael Nicolls, who serves as vice president of Starlink Engineering, announced via X that the company is filling “many critical engineering roles” supporting space-based data center initiatives, including a Space Lasers Engineer position located in Redmond, Washington.

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The company revealed plans to acquire Musk’s AI venture xAI, emphasizing orbital AI infrastructure as a strategic long-term objective.

Proof-of-Concept Missions Underway

In November 2025, Nvidia-supported startup Starcloud achieved a milestone by deploying the first Nvidia H100 GPU to orbit aboard a SpaceX Falcon 9 launch vehicle. The Starcloud-1 satellite weighed approximately 60 kilograms — comparable to a compact refrigerator.

Starcloud’s ultimate vision encompasses a 5-gigawatt orbital data center spanning roughly 4 kilometers, equipped with extensive solar arrays and thermal management panels.

BNP acknowledged that long-term technological improvements in satellite communications, cooling architectures, and photovoltaic systems could eventually narrow the operational cost gap between orbital and ground-based data center facilities.

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Crypto World

How AI Agents Can Reshape Arbitrage in Prediction Markets

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How AI Agents Can Reshape Arbitrage in Prediction Markets

Prediction markets aggregate human judgment in theory, but some of their consistent trading opportunities may end up captured by systems that move faster than any person can.

Arbitrage opportunities can show up as brief mispricings, from outcomes that temporarily fail to sum up to 100%, to short delays in how quickly markets react to new information.

Rodrigo Coelho, CEO of Edge & Node, said bots are already scanning hundreds of markets per second, a role that increasingly overlaps with more advanced AI-driven agents.

“Capturing those opportunities requires monitoring thousands of markets and executing trades almost instantly, which is why they’re largely dominated by automated systems,” Coelho told Cointelegraph.

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That makes prediction markets a natural next step for AI-driven systems built to exploit short-lived pricing gaps without human input.

AI agents can target brief gaps in prediction markets. Source: Rohan Paul

Arbitrage mechanics in prediction markets

Bitcoin and crypto prices haven’t been performing well recently, with BitMine’s Tom Lee calling the current sentiment a “mini-crypto winter.” Meanwhile, prediction markets have emerged as venues where users can bet to profit independently of broader economic conditions.

The rise of prediction markets has also seen opportunities such as what Coelho calls “latency arbitrage,” which rely on short windows too narrow for humans to manually target. He told Cointelegraph:

If there’s even a few-second delay between an event happening and the market updating, bots scan for that and place bets on the correct outcome. For that window, they have a 100% guaranteed win.”

A recent study found that Polymarket exhibits frequent pricing inconsistencies, allowing traders to construct arbitrage positions. These opportunities arise both within individual markets, where probabilities don’t sum to 100%, and across related markets with inconsistent pricing. The researchers estimated that roughly $40 million has been extracted from these inefficiencies.

Academic researchers present their findings at the International Conference on Advances in Financial Technologies. Source: CyLab/YouTube

Prediction markets are still nascent, but their technology has been improving as well. For example, Polymarket recently introduced taker fees to increase trading costs. Outcomes aren’t finalized immediately, making these strategies less reliable and not always profitable.

AI agents could amplify market manipulation risks

Aside from arbitrage, AI agents could increasingly take over activity in prediction markets, raising concerns that automated systems may replicate the same behaviors seen from humans. They are trained on human activity, after all. 

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Coelho pointed out that large players can influence outcomes by placing sizable bets on one side, and that more advanced agents could exploit similar dynamics at scale.

“If you have a large pool of money and the market is thin, you can bet on one side and sway the market, like we saw in the election when some French guy put in like [$45 million] on Donald Trump winning,” he said.

Polymarket’s open interest was highest around October and early November of 2024, during the US elections, according to Dune Analytics data. Following a sharp initial decline, it has continued to surge in popularity, with politics leading as the most popular topic, followed by sports and crypto.

Polymarket’s open interest is nearing 2024 election levels. Source: datadashboards/Dune Analytics

Related: Federal regulation looms as 11 states go after prediction markets

Pranav Maheshwari, engineer at Edge & Node, said the rapid improvement of AI agents alongside prediction markets makes such risks more urgent and called for guardrails.

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“Up until now, AI agents have medium capability and we give them a lot of permissions. With this medium capability, they have already started acting autonomously,” Maheshwari told Cointelegraph.

But in the future, AI agents will have really high capabilities. When it has really high capabilities as humans, you have to restrict their permissions.”

From execution bots to AI-driven systems

Trading itself is undergoing a shift, as automation moves from simple execution bots to more advanced, AI-assisted systems capable of identifying and acting on opportunities in real time.

The systems currently used to exploit market inefficiencies remain largely rule-based, but the tools behind them are evolving.

Archie Chaudhury, CEO of LayerLens, said most retail participants are not using AI agents directly, relying instead on chatbot interfaces like ChatGPT or Gemini for research, while more advanced users are beginning to experiment with automation.

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“Some of us simply use coding agents such as Claude Code to create automated bots or algorithms for executing trades, while others take it a step further, using autonomous tools such as OpenClaw to enable the automatic execution of trades and other policies,” he told Cointelegraph.

Related: Do Super Bowl ads predict a bubble? Dot-coms, crypto and now AI

As AI literacy among retail traders rises, agents could broaden access to strategies that were previously limited to institutions, according to Chaudhury. However, this does not eliminate competition, and large institutions are already using AI, though not always publicly.

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He added that existing large language model architectures are well suited to interpreting structured financial data, which could lower the technical barrier for building trading systems that would have previously required specialized quantitative expertise.

The same dynamics are already visible across crypto markets, where arbitrage increasingly depends on automation rather than human judgment. As these systems evolve, the edge is shifting execution speed. Those leaning on AI and automation have a clear edge over those that don’t.

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