Space companies are in preliminary discussions with insurance providers about coverage for data centers operating in Earth’s orbit — a sign that an experimental industry backed by some of the biggest names in tech is beginning to take shape.
The idea of placing data centers in space — partly to get around power limitations on Earth — has attracted increasing attention after Elon Musk described the concept as the future of AI development ahead of SpaceX’s record-setting public listing this month. Blue Origin, the space company founded by Jeff Bezos, along with several startups including Orbital, Starcloud, Lonestar Data Holdings, and Cowboy Space, have all indicated plans to launch space-based data centers.
Getting insurance coverage is considered a key hurdle for these companies. Without it, securing the debt financing necessary to grow such ventures would be extremely difficult.
Reuters spoke with four brokers and underwriters and three space companies, all of whom confirmed that conversations about orbital data center insurance have taken place — though those discussions are still in early stages.
Insurance broker Marsh confirmed that multiple companies have reached out to insurers to learn what coverage for orbital data centers might look like, though the firm declined to name those companies.
“We’re already starting to see companies that are focused on data centers and companies that are focused on digital infrastructure looking to the insurance community for support,” said Patton Kline, U.S. aviation and space practice leader at Marsh.
Lonestar said it recently hosted a briefing at Marsh’s offices for insurance marketplace Lloyd’s of London, with roughly 25 insurers in attendance.
SpaceX and Blue Origin did not respond when contacted for comment.
While insurers already have experience covering launch failures, satellite problems, orbital debris, and space weather — a global market that brings in about $500 million in annual premiums, according to industry executives and insurance firm Axa XL — orbital AI infrastructure is an entirely different matter.
“The conversations in the market are focused on whether the risk can be modeled, rather than what the premium should be,” said Kasey Roh, U.S. head of Upstage AI, a company that builds AI tools for insurers.
One major challenge involves placing a value on fast-evolving AI chips that could be exposed to extreme conditions in space, according to Orbital CEO Euwyn Poon.
David Wade, a space underwriter at Atrium, noted that most of the companies involved are still in early venture-capital-funded stages, and a significant insurance market won’t emerge until they grow further.
“Until we get past that early round of financing and start seeing some of these companies expand by raising debt, I think the insurance needs are very limited at the moment,” Wade said.
