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.
In deep space (no incident power) you need roughly 2000 sq meters of surface area per megawatt if you want to keep it at 40C. That would mean your 100 MW deep space datacenter (a small datacenter by AI standards) needs 200000 sq meters of surface area to dissipate your heat. That is a flat panel that has a side length of 300 meters (you radiate on both sides).
Unfortunately, you also need to get that power from the sun, and that will take a square with a 500 meter side length. That solar panel is only about 30% efficient, so it needs a heatsink for the 70% of incident power that becomes heat. That heatsink is another radiator. It turns out, we need to radiate a total of ~350 MW of heat to compute with 100 MW, giving a total heatsink side length of a bit under 600 meters.
All in, separate from the computers and assuming no losses from there, you need a 500x500 meter solar panel and a 600x600 meter radiator just for power and heat management on a relatively small compute cluster.
This sounds small compared to things built on Earth, but it's huge compared to anything that has been sent to space before. The ISS is about 100 meters across and about 30 meters wide for comparison.
What is this figure based on?