SoftBank CEO questions Elon Musk's vision of AI data centers in space: 'What's the point?'

SoftBank boss Masayoshi Son isn't convinced that the future of powering artificial intelligence lies in orbit.

While speaking at one of the Japanese tech conglomerate's annual shareholder meetings on Tuesday, Son, the CEO and founder, challenged the economic case for putting AI data centers in space, an idea championed by Elon Musk.

"What's the point? What's the benefit of building AI data center in space?" Son said in response to a shareholder question, arguing that lower electricity costs alone would not justify the complexity of operating data centers in orbit.

According to a SoftBank translation of his remarks, Son contended that electricity accounts for only about 7% of the cost of operating AI infrastructure, while chips needed to run and train AI models, as well as other expenses, make up the remaining 93%.

The billionaire added that any savings from lower electricity costs would be outweighed by the additional maintenance, networking and latency-related costs associated with operating data centers in space.

Son said the economic and technical tradeoffs of space-based AI infrastructure could take years to figure out. In the meantime, he said SoftBank is determined to position itself at the forefront of the AI boom.

"The winner will be decided in the next some years, so rather than focusing on the space where we have no idea what will happen in terms of AI-related business, we would like to focus on more with the near-sighted perspective," said Son, "and we would like to become first-comer in any businesses related to AI."

Son prefaced his criticism of space-based data centers by praising Musk, the world's richest person, as a pioneering entrepreneur. The CEO of SpaceX and Tesla has promoted the idea of putting data centers in orbit as a potential solution to AI's soaring energy demands.

Earlier this year, SpaceX said it aims to build a "constellation of a million satellites that operate as orbital data centers" and that it had begun hiring engineers to make the vision a reality.

Tech billionaires like Amazon founder Jeff Bezos and Google CEO Sundar Pichai have also embraced the idea of space-based data centers to scale AI. Pichai has called the notion a "moonshot," but said, "when you truly step back and envision the amount of compute we're going to need, it starts making sense and it's a matter of time."

OpenAI CEO Sam Altman, on the other hand, has slammed the concept of putting data centers in space as "ridiculous."

"We are not there yet," Altman said in February. "There will come a time. Space is great for a lot of things. Orbital data centers are not something that's going to matter at scale this decade."