Space Startups Pursue Insurance for Satellite‑Based AI Data Centers

By Akash Sriram and Jemima Denham

NEW YORK/LONDON, June 18 (Reuters) – Space firms are in discussions with insurers about coverage for orbital AI data centers, indicating early progress for an emerging sector backed by Elon Musk’s SpaceX and Jeff Bezos’ Blue Origin.

The idea of data‑center satellites—designed to sidestep Earth’s power limits—has gained traction since Musk called them the future of AI development ahead of SpaceX’s record‑breaking public listing. Obtaining insurance is essential for firms that want to transform orbital data centers from concept to reality; without coverage for expensive hardware and associated risks, securing the debt financing needed for scale would be difficult.

Blue Origin and a range of startups—including Orbital, Starcloud, Lonestar Data Holdings and Cowboy Space—have indicated plans to launch space‑based data centers.

Reuters spoke with four brokers and underwriters and three space firms, all of which confirmed that preliminary talks about orbital data‑center coverage have taken place.

Insurance broker Marsh said several companies have approached insurers to gauge what future coverage for orbital data centers could look like, though it did not name the firms.

“We’re already seeing data‑center operators and digital‑infrastructure providers turning to the insurance community for support,” said Patton Kline, U.S. aviation and space practice leader at Marsh.

Lonestar recently held a briefing at Marsh’s offices for Lloyd’s of London, attended by roughly 25 insurers.

SpaceX and Blue Origin did not respond to requests for comment.

Insurers already cover launch failures, satellite malfunctions, orbital debris and space‑weather events in a global market that generates roughly $500 million in annual premiums, according to industry executives and Axa XL.

However, while insurers have decades of experience with satellites, they have little data on orbital AI infrastructure.

“Market conversations 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, which builds AI tools for insurers.

Part of the challenge is valuing rapidly advancing AI chips that could be vulnerable to harsh space conditions, according to Orbital CEO Euwyn Poon.

David Wade, a space underwriter at Atrium, noted that venture‑backed startups would need to scale before a robust insurance market for orbital data centers could emerge.

“Until we get past this early financing round and see companies start raising debt, the insurance demand remains limited,” he added.

(Reporting by Akash Sriram in New York and Jemima Denham in London; Editing by Joe Brock, Rod Nickel)

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