NeevCloud, an AI cloud infrastructure company supported by RackBank Datacenters, has entered into a memorandum of understanding (MoU) with Chennai's rocket startup Agnikul Cosmos to develop what both companies claim will be India's inaugural AI-driven data centre in space.

The collaboration intends to deploy high-performance AI inference nodes in low Earth orbit (LEO), enabling data processing to occur directly in space and transmitted to users on Earth with considerably reduced latency, the companies stated.

Narendra Sen, founder and chief executive of NeevCloud says,“We are not just building a data centre in space, we are building an entirely new layer of orbital inferencing infrastructure. To truly democratise AI, we must decouple it from terrestrial limitations.”

Under the MoU, Agnikul will provide the launch vehicle and orbital hosting platform using its lightweight, extendable upper-stage rocket architecture. Unlike conventional missions where upper stages become inert debris, Agnikul’s upper stage will remain in orbit and be repurposed as a functional space-based data centre, while the lower stage returns safely to Earth.

Srinath Ravichandran, Co-founder and CEO of Agnikul Cosmos says, “As with all rockets, with more launches, we naturally leave behind upper stages in orbit. Our convertible upper-stage technology lets these stages stay active and functional, turning them into usable assets that can host compute or data capabilities.”

NeevCloud announced that it will implement and manage AI computing infrastructure on these orbital platforms, overseeing AI inferencing and processing using its cloud orchestration systems. The companies announced that the data centres located in space will be completely powered by solar energy.

The initiative focuses on applications where immediate AI processing is essential, such as defense and border monitoring, maritime and energy activities, industrial automation, and distant decision-making. Operating from orbit, the model seeks to minimize dependence on various terrestrial edge data centers, thus decreasing capital costs, land usage, energy use, and cooling demands, while prolonging the lifespan of valuable AI chips.

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Industry estimates referenced by the firms indicate that over 80 percent of the global population presently resides more than 200 milliseconds from the closest AI data center, restricting the reliability of latency-sensitive applications across many regions in the Global South.

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The initial pilot launch is set to take place before the year's conclusion. Pending successful validation, NeevCloud intends to expand the network to over 600 orbital edge data centres within the next three years, establishing what it refers to as a continuous, nearly real-time AI inferencing layer.

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The partnership positions India at the crossroads of the swiftly expanding AI inference market, which is projected to reach $ 255 billion worldwide and is growing at almost 20 percent each year, along with the developing orbital data center and space-compute sector.