When Elon Musk told the World Economic Forum that it would be cheaper to build data centres in space within three years, the audience divided predictably between visionaries and sceptics. But for Israel — a country that has built a $600 billion global space economy stake from a territory smaller than New Jersey — the question is not whether orbital compute will happen. It is whether Jerusalem understands the option it already holds.

The numbers are startling. The orbital data centre market, valued at roughly $1.8 billion by 2029, is projected to reach $39 billion by 2035 at a compound annual growth rate north of 67 per cent. Google is preparing a pilot data centre in orbit for 2027. Axiom Space plans to install a computing node on the International Space Station. SpaceX and xAI, now merged into a $1.25 trillion entity, have filed for one million data centre satellites. Abu Dhabi’s Madari Space is targeting its first orbital mission in late 2026. This is no longer a whiteboard exercise. February 2026 marked the first month in history in which multiple operators simultaneously ran production workloads in space.

The economics are seductive. Solar energy in orbit costs as little as $0.005 per kilowatt-hour. There is no water for cooling — because you do not need any. There are no planning permissions, no NIMBYs, no grid bottlenecks. Against this, terrestrial hyperscalers — Alphabet, Amazon, Microsoft, Meta — are projected to spend $400 billion on ground-based data centres in 2026 alone, a figure that makes orbital alternatives look less like science fiction and more like a hedge.

Israel is one of fewer than a dozen nations that both build their own satellites and launch them on indigenous rockets. The Shavit launcher, developed from the Jericho ballistic missile programme, can place payloads into........

© The Times of Israel (Blogs)