Space is a vacuum. i.e. The lack-of-a-thing that makes a thermos great at keeping your drink hot. A satellite is, if nothing else, a fantastic thermos. A data center in space would necessarily rely completely on cooling by radiation, unlike a terrestrial data center that can make use of convection and conduction. You can't just pipe heat out into the atmosphere or build a heat exchanger. You can't exchange heat with vacuum. You can only radiate heat into it.
Heat is going to limit the compute that can be done in a satellite data centre and radiative cooling solutions are going to massively increase weight. It makes far more sense to build data centers in the arctic.
Musk is up to something here. This could be another hyperloop (i.e. A distracting promise meant to sabotage competition). It could be a legal dodge. It could be a power grab. What it will not be is a useful source of computing power. Anyone who takes this venture seriously is probably going to be burned.
For example: quite apart from the fact of how much rocket fuel is it going to take to haul all this shit up there at the kind of scale that would make these space data centres even remotely worthwhile.
I'm not against space travel or space exploration, or putting useful satellites in orbit, or the advancement of science or anything like that - quite the opposite in fact, I love all this stuff. But it has to be for something that matters.
Not for some deranged billionaire's boondoggle that makes no sense. I am so inexpressibly tired of all these guys and their stupid, arrogant, high-handed schemes.
Because rocket fuels are extremely toxic and the environmental impact of pointlessly burning a vast quantity of rocket fuel for something as nonsensical as data centres in space will be appalling.