Europe risks becoming dependent on foreign space-based computing infrastructure as China and the United States move faster to develop orbital data centres, according to a new report from the European Space Policy Institute.
The independent think tank said European organisations are still largely assessing the potential of orbital data centres, while Chinese institutions and companies have begun moving towards implementation and US ventures are attracting major commercial funding.
Orbital data centres, or ODCs, are proposed networks of satellites designed to process data in space rather than relying entirely on ground-based facilities. Supporters say the technology could initially help process Earth observation data close to where it is collected, reducing the amount of information that needs to be sent back to Earth and speeding up the delivery of intelligence.
In a report published on 5 August, ESPI warned that Europe’s slower progress could leave it reliant on infrastructure controlled elsewhere. “While European actors continue to weigh the development of orbital data centres, Chinese institutions and companies are already moving towards implementation,” the report said.
The think tank singled out China’s rapid development in the field, saying it had been supported by a combination of national policy, municipal initiatives and backing from state-owned enterprises. It said the Three-Body Constellation, launched by ADA Space in 2025, was the first operational example of space-based computing.
Chinese startup ADA Space, working with the research institution Zhejiang Lab, deployed the first 12 satellites of a proposed 2,800-satellite network in May 2025. China later said in-orbit tests had demonstrated core capabilities including networking, computing, model deployment and scientific payload verification.
ESPI said other Chinese ventures pursuing orbital computing include China Mobile, Comospace, Bailing Aerospace, Orbital Chenguang and Shanghai Xingshu Tiansuan Space Technology Co. The report said Shanghai Xingshu Tiansuan Space Technology had reportedly begun deploying a planned 1,000-satellite space-computing network in July. Chinese launch companies iSpace and Nayuta Space have also outlined plans to enter the market.
The report said Beijing took further steps in June to build an industrial framework around orbital computing, with municipal science and technology agencies issuing a call for proposals on enabling technologies. ESPI described China’s approach as top-down and policy-led, in contrast with the largely commercially driven activity seen in the US.
“Beijing views space-based compute as the next frontier of its broader technology strategy: a way to produce advanced computing capabilities domestically and export them overseas — much like its US counterparts — while positioning itself to help set the global standards and regulation for an entirely new industry before others get there first,” the report said.
The institute added: “As China continues to expand its activities for ODCs at this pace, European actors should heed close attention or risk relinquishing space compute capabilities to the United States and China.”
Europe has supported several technologies relevant to orbital computing, but ESPI said these have not yet been organised around a large-scale deployment strategy. The report said European activity remains focused on research and small-scale technology demonstrations.
Some commercial plans have emerged in Europe, including proposals announced earlier this year by French startup ALATYR for robotically assembled orbital data centres. However, ESPI said European commercial projects have yet to match the scale of activity seen in China or the level of private capital flowing into US companies.
In the United States, orbital data centre ventures have begun attracting sizeable funding rounds. ESPI cited Starcloud and Cowboy Space as among the sector’s newest and youngest unicorns, with each valued at more than $1bn.
The first commercially viable applications for orbital data centres are likely to focus on processing Earth observation data in orbit, according to the report. By filtering or analysing information near the point of collection, satellite operators could reduce the volume of data transmitted to ground stations and provide faster access to usable outputs.
More ambitious concepts remain further away. ESPI said globally distributed computing networks and large-scale artificial intelligence training in space, as envisaged by companies including SpaceX, are likely to be more than a decade from practical deployment.
The report called on the European Union to recognise orbital data centres as an emerging pillar of technological sovereignty. It urged policymakers to coordinate policy, investment and regulation around the technology, rather than treating it only as a set of separate research projects.
ESPI also said Europe could learn from China’s approach by combining policy drafting with industry implementation, while developing its own framework for orbital computing. The institute’s warning comes as governments and companies increasingly view space infrastructure not only as a communications and observation asset, but as part of future computing capacity.
