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.
Power input and heat radiation both scale with area so maybe there is some way to achieve this at scale. For instance, maybe it will not look like a traditional data center or even traditional chips.
One of the motivations behind this whole thing could be that he could make a way for foreign talent to work on space projects without the necessary government signoff.
I'd say less than a third.
Wouldn't a simpler explanation be that SpaceX is making a lot of money while xAI is losing a lot. If funds have to flow through Elon personally it is likely complicated and costly. Also, if the "space data center" idea is actually workable (I have no idea if it is) then it does make some logical sense as well. Of course, Twitter just seems like kind of a write off to me at this point.