By Garvin Jabusch
February, 2026
We often talk about the Next Economy as a function of efficiency—doing more with less, deleting the friction of legacy systems, and aligning our economic engine with planetary boundaries. Recently, a fierce debate over the future of AI compute has emerged: Should we keep building power-hungry data centers on Earth, or should we launch them into orbit?
On one side, we have Casey Handmer arguing from a first-principles physics perspective. On the other, Andrew Yoon applying a harsh market sanity check. And recently, a deep dive by Wired introduced the ultimate constraint: thermodynamics.
Both sides agree on one massive premise: The metabolic engine of the future is solar. But they diverge wildly on where that engine should live. Here is why the high ground might actually be a thermal trap.
The Case for Earth: Radical Simplification
Handmer’s most cogent point isn’t actually about space; it’s about the “deletion” of waste here on Earth. He envisions a terrestrial data center stripped of the legacy grid. No AC/DC inverters, no transformers, no gas turbines. Just a direct line of sight from a photon hitting a silicon panel to an electron moving through a GPU.
This is the Next Economy in its purest form. By removing the parasitic load of the 20th-century grid, you get massive efficiency gains. It’s a vision where we pave the desert with solar and wire it directly to the brain of the AI.
The Case for Space: Bypassing Bureaucracy
Handmer then extends this logic to orbit. Why space? Not just for the constant sunlight, but to bypass the “entropy” of human bureaucracy—permitting, NIMBYism, and regulatory gridlock. If you have the rockets, why not move the compute to a place with zero red tape?
The Reality Check: The Thermal Illusion
This is where the Wired analysis steps in and pours cold water on the space dream—or rather, proves that you can’t pour cold water on it.
There is a fundamental misconception that space is “cold.” Space is a vacuum. On Earth, a hot server transfers heat to the air via conduction and convection (which is why data centers use massive fans and water evaporation). In the vacuum of space, those mechanisms do not exist. The only way a computer can cool down is through thermal radiation, governed by the Stefan-Boltzmann law:
P = εσAT4
In this equation, the power radiated (P) depends heavily on the surface area (A) and the temperature (T). Because of the square-cube law, as you scale up a data center, its heat-generating volume grows exponentially faster than its heat-radiating surface area.
If you try to build a massive, Walmart-sized data center in orbit, it will simply melt.
The Swarm Trap and Kessler Syndrome
Because of these brutal thermal physics, you cannot build a few giant orbital servers. You are mathematically forced to build a swarm of millions of tiny, highly inefficient micro-satellites just to maintain the necessary surface-area-to-volume ratio for cooling.
This is where Yoon’s logistical nightmare becomes reality.
On Earth, AI hardware depreciates like milk. You swap your chips overnight. In space, you are stuck with a massive fleet of rapidly aging hardware. Worse, launching millions of tiny AI satellites into Low Earth Orbit dramatically increases the risk of Kessler syndrome—a cascading explosion of debris that could cripple our access to space entirely.
The Verdict for Investors
So, is orbital compute the Next Economy? No. It is a hype cycle trying to outrun physics, ultimately forcing a design architecture that creates apocalyptic levels of space junk.
The real “Next Economy” signal here isn’t the rocket launch; it’s the DC-to-DC integration on Earth. The smart money is on the terrestrial application of off-grid, direct-solar compute that deletes the inefficiencies of our current infrastructure. That is where the true metabolic advantage lies. Space has lots of cool potential, just not for data centers.
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