Blue Wave Pushes Tech Investors to Pitch Data Centers in Space

Elon Musk declared “Data centers in space looking pretty appealing right now” on X in the early hours of Wednesday, after Democrats took the House and the Senate and flipped races across Texas — the national data center hotspot and home to SpaceX.

The post set the tone for a strange day in tech. Data center enthusiasts took to social media to insist they're still “bullish” on building data centers — just not necessarily in Texas, or even on Earth. Musk, who sank more than $400 million of his fortune supporting Republican candidates who all went on to lose their midterm races, led the charge for orbital compute.

Jordan Lasker — the man behind the X account “Crémieux,” a popular follow in the tech world and known for posting race-based pseudoscience — joined in. “Data centers in space are an incredible idea and anyone who doubted them didn't think enough about tonight's election results,” he wrote.

Throughout the day, Musk employees, tech investors, AI researchers, venture capitalists, and industry fans piled on. Soham Mehta, a research fellow at the techno-optimist think tank Foundation for American Innovation, argued that underwater data centers deserve consideration too. China, for context, began operating what it claims is the world's first underwater data center in June.

Who is actually building orbital compute?

The talk isn't entirely vapor. Several companies are already moving compute into orbit:

• Google launched a satellite it says contains “data center class TPU.”
• SpaceX says it aims to deploy “thousands of AI satellites starting as soon as late 2027.”
• Blue Origin filed for a Federal Communications Commission permit to launch 50,000 satellites that would constitute an “orbital data center system.”
• Starcloud, a startup, claims it carried “the first NVIDIA H100 GPU into orbit” in November 2025.

The engineering realities remain harsh, though. Space-based data centers cost much more than land-based ones. They can't grow to hyperscale size. And they live at the mercy of launch schedules, rocket failures, and the general whims of getting hardware off the planet.

What does the election actually change in Texas?

The tech industry's anxiety about Texas isn't baseless. A wave of Democratic candidates won state and congressional races there on Tuesday, including many who campaigned against the data center industry. Experts tell WIRED the change in leadership could produce concrete policy shifts — with limits.

The first limit is structural. Democrats now control the Texas House, but Republicans still hold the state senate. Robert Paterson, professor of land use and environmental planning at the University of Texas at Austin, tells WIRED that the split means some immediate attempts at change “will probably be stymied a bit.”

The second limit is legal. Texas developers hold unusually strong “vested rights,” Paterson notes. Those rights protect the terms of a project from the moment its permits are approved — even if construction hasn't begun yet. That shields existing and permitted data center projects from much of the incoming political shift.

Where can the new leadership actually act?

Adrian Shelley, director of the nonprofit consumer advocacy group Public Citizen's Texas office, tells WIRED the legislature is the likely venue for hashing out high-impact policies, such as the reallocation of state agency resources.

The governor can move faster, Shelley adds. Executive orders are one route. Requesting the resignations of politically appointed officials in state agencies is another.

Those agencies matter. Shelley points to the Texas Commission on Environmental Quality, the Public Utility Commission, and the Texas Water Development Board as oversight bodies with real teeth. They can charge fines for breaking state law. In extreme cases, they can revoke permits for projects like data centers entirely.

Is there a county-level path to regulation?

There's a medium-term route that Paterson highlights: giving counties more power. Nearly half of the state's data centers sit in unincorporated territory, he says, which puts them outside the jurisdiction of city zoning laws.

Texas counties are unusually weak regulators. Under the state's so-called Dillon's Rule, counties only have powers that are “specifically allotted to it by the state.” They control things like access and egress to county roads, or construction on floodplains. They lack the zoning authority that would let them closely regulate projects like data centers.

Paterson says the new attorney general could theoretically adjust the terms in the state's biannual handbook, which sets the limits of county authority. He also argues that a split legislature isn't necessarily a dead end — anti-data center sentiment crosses party lines — and that state lawmakers could pass a viable bill giving counties “limited zoning authority over data centers.”

Why the stakes go beyond one election night

The money and the politics are colliding at scale. Musk's $400 million in political spending produced zero wins, and the industry that leaned hardest into Texas land, cheap power, and permissive rules now faces a legislature where at least one chamber is hostile. Meanwhile, the loudest voices in tech are framing low-Earth orbit as the exit strategy, despite the cost and scale problems.

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 it doesn't change, the industry's new refrain suggests where it plans to look next: away from Texas zoning fights and toward thousands of satellites, a Google TPU already in orbit, and Blue Origin's paperwork for 50,000 of them.