China is moving fast to dominate orbital data centres, and Europe risks being left behind, according to a new policy brief from the European Space Policy Institute (ESPI). The brief, titled "Constellating Compute: China's Domestic Policy Towards Orbital Data Centre Leadership," warns that if the technological gap widens, Europe may have to rely on third parties to process its own space data, potentially losing access to critical orbital information.
Orbital data centres are increasingly seen as strategic assets for handling the massive data flows generated by artificial intelligence and satellite systems. While Europe has started to explore the concept, its efforts remain small-scale compared with the rapid progress in China and the United States.
Europe's limited steps
The EU-funded ASCEND project, backed under Horizon Europe since 2023, has concluded that orbital data centres could strengthen European digital sovereignty. The European Space Agency (ESA) has also collaborated with UK firm Open Cosmos on the Φ-sat-2 satellite, which carries AI capabilities for Earth observation. French start-up ALATYR has announced plans to manufacture robotically assembled orbital data centres. Yet these initiatives are isolated and lack the scale of China's state-backed push.
According to the ESPI brief, Europe's fragmented approach is widening the gap. The brief recommends that the EU establish coordinated political guidance, investment support, and a regulatory framework for orbital data centre development. It also suggests including a flagship initiative in the Horizon Europe Moonshot Projects under the 2028-2034 Multiannual Financial Framework, and convening working groups with international counterparts on standards and data sovereignty.
China's strategic advantage
China has treated space-based computing as a national strategic priority, with a wave of state-backed initiatives and policies. Central to this effort is the state-owned China Aerospace Science and Technology Corporation (CASC), which first formalised orbital data centres in a new strategy, alongside the Beijing Municipal Government and the Zhongguancun Science Park.
The brief highlights how China combines top-down policy drafting, private and state-owned industry adaptation, municipal and provincial government incentives, and support for non-state actors and working groups. This coordinated approach has led to high-profile prototype constellations.
The Three-Body Constellation, launched by start-up ADAspace in May 2025, marked the first operational example of space-based computing. In a joint laboratory with Shanghai Jiao Tong University, ADAspace has since used the constellation's in-orbit computing power to control a robot on the ground, one of several technical trials the company has run since the satellites reached orbit.
Other companies have followed. Beijing Orbital Twilight Technology Co., Ltd. (Orbital Chenguang) announced an undisclosed equity round alongside €7.4bn worth of debt financing in April 2026. Nayuta Space unveiled its ALAYA supercompute constellation, planned to deploy 12,500 computing satellites. Shanghai Xingshu Tiansuan Space Technology Co. unveiled its Xingshu Plan at the World AI Conference in July 2026, envisioned to grow to 1,000 satellites. China Mobile, Zhejiang Lab, Bailing Aerospace, Zhongke Tiansuan Technology and Interstellar Glory Space-Based Computing Technology (iSpace) have also announced their own constellations.
Beijing's municipal government has moved to incubate the sector further, issuing a call for orbital data centre project proposals in June 2026 alongside the Zhongguancun Science Park, and launching a space computing innovation centre bringing together rival companies including GalaxySpace and Landspace under a company-plus-alliance model. According to state broadcaster CGTN, the centre's priority areas include space-based computing chip design, high-performance computing payloads and integrated space-ground cloud computing technologies.
CASC has also outlined a five-year plan for the sector, agreed with the Chinese Society of Astronautics in January 2026 under the guidance of state bodies including the China National Space Administration. According to CGTN's reporting on the plan, it includes building gigawatt-level space digital infrastructure combining cloud, edge and terminal technologies, though the underlying policy documents do not appear to have been formally published, and Euronews could not independently verify the claims.
The ESPI brief warns that without a coordinated European response, the continent may find itself dependent on external actors for its space-based computing needs. The stakes are high: as AI and satellite data volumes grow, orbital data centres could become as critical as terrestrial data centres are today. Europe's digital sovereignty may depend on how quickly it can catch up.
For now, the gap is widening. The EU's Horizon Europe programme and ESA's projects are steps in the right direction, but they lack the scale and urgency of China's national strategy. The brief's recommendations offer a roadmap, but it remains to be seen whether European policymakers will act with the speed required.
