Masayoshi Son told shareholders that energy only makes up a fraction of the overall costs needed to build and deploy data centres.

Space-based data centres aren’t all that they are made up to be, according to Softbank founder Masayoshi Son.

His comments come as Elon Musk attempts to make orbital data centres a reality with SpaceX, with the hope that the large energy users would tap the near-constant solar power from the sun.

Earlier this year, SpaceX filed an application with the US Federal Communications Commission for a satellite constellation of up to 1m as a foundation for its orbital AI data centres. The company currently has more than 10,000 active satellites in orbit.

Speaking to shareholders today (23 June), Son said that equipment and maintenance makes up the majority of the costs associated with data centres, with electricity making up only around 7pc.

While moving data centres to space can help reduce the electricity costs, the added distance creates additional disadvantages around latency, he explained.

“In the battle for AI, the next few years will be far more important than what might happen a decade or so from now,” he said.

Son explained that rather than focusing on space, which poses several variables when it comes to AI-related business, Softbank will instead build “formidable” data centre capacity on Earth.

The Softbank head called Musk a “remarkable agent of change”, but said that filling the gap to make space data centres more advantageous will take “some more years”.

SpaceX’s plans for orbital data centres hinge on its heavy-duty Starship rockets that carry massive payloads to the orbit. The company debuted its latest and largest Starship V3 rocket last month and plans to launch its V3 Starlink satellites later this year.

Duncan Davidson, a partner at Bullpen Capital told CNBC last week that that business case for space-based data centres are “really strong” as costs for building capacity on Earth are expected to go up.

Meanwhile, the Japanese tech investor has committed around $65bn into OpenAI, and has made plans worth hundreds of billions to build data centres across the globe.

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