I was responding to the suggestion to put them further away than low Earth orbit. Using "hundreds or thousands of satellites" would literally only make every problem I described worse, not easier, so I assume you missed that part and want to argue the merits of running what's essentially a botnet in low Earth orbit and calling that a "data center". Fine by me although I'm not sure why you decided to respond to me in particular.
You can run compute in low Earth orbit but compute runs hot. We're not talking 500 GPUs a pop but even for an 8 GPU node you need some 40 m^2 surface just for thermal dissipation. I assume by "distributed" you also imply that they're not going to be in sunlight 24/7 and operate more like Starlink so they'll need batteries to keep running for a third or so of their lifetime.
Low Earth orbit also means you don't have to worry about radiation frying your off-the-shelf hardware without the heavy shielding but you'll still have lots of random bit flipping to deal with and storage is largely going to be unreliable for anything but short-term, especially on SSDs.
Distributed also means you replace local speeds with network speeds - Google was only able to achieve feasible "data center" data rates by having satellites fly within less than a kilometer of each other (i.e. densely packed in space terms, no longer really "distributed" in terms of proximity) and even that had orders of magnitudes worse latency (obviously) than you'd have in a data center pod (though not quite as bad as the multi-millisecond latency you'd have at current Starlink level distances).
"Orbital data centers", even if operated as fleets of disposable low-performance pods instead of singular "out of reach" disposable mini DCs, are worse than real data centers on every single metric: they're slower, more expensive, unrepairable, degrade more rapidly and require more redundancy to compensate for random errors.
There are pretty much just three use cases:
- Providing space-based processing for space-based data collection to reduce the amount of data that needs be sent to ground (realistically speaking in the current climate this pretty much only describes surveillance).
- Avoiding regulatory oversight, permit processes and most risks (e.g. earthquakes, missile strikes, protests, sabotage) associated with building and operating a real data center.
- Avoiding energy price increases that might make operating a real data center more expensive compared to the fixed cost of continuing to operate an already launched satellite.
I'm surprised nobody seems to have pointed this out but one of the biggest factors in the premises that would make this entire idea somewhat economically viable (assuming energy prices increase in ways that affect data centers without also massovely affecting the supply chain for launching things into space) is Musk's claim that they not only can make the upper stages reusable and recover them but also that inspecting, refurbishing and reusing them will be considerably cheaper than replacing them. If they can't make launches significantly cheaper still (not that they aren't already ridiculously cheap all things considered), using a fleet "designed to be distributed across hundreds or thousands of satellites" would be economically unviable compared to just stuffing a single satellite to the brim (especially if you can avoid the battery).
But then the single advantage becomes "it's in space" and that is really only interesting for compute running on data already collected in space - and if that is a problem big enough to be able to sustain an entire business model justifying SpaceX's valuation... well, let's just say that would be the kind of world where if it were a movie the major plot point would be the destruction of that company or defeating the regime that enables it.