Yeah it's tricky, given the pushback people are showing against datacenter construction, the issues around power, the vulnerability to attack... The space data center idea is starting to become more attractive to big tech over time, not less.

Initially, everyone agreed that the numbers just don't add up, there's no way it could be economical. But then these terrestrial datacenters started getting a lot of bad press, everyone was concerned about the environmental impact, about the strain on the energy grid, about water usage. All of a sudden the space plan is seeming less crazy.

and if they're in LEO, they'll fall back down to earth. Oh, and there's more likelyhood that bits get flipped from all of the high energy particles up there.

You're thinking about the right things here, these are major issues! But, they can largely avoid serious problems here. Over 500 km, there's a lot less drag and these aren't just going to fall out of the sky. And under 1000 km the earth's magnetic field still mostly protects them from high energy particles. They will still definitely be more exposed to high energy particles causing random bit flips, but it's going to be in a totally manageable range.

Giant AI datacenters will truly never be an efficient or wise use of resources, at least in my opinion, it's just a largely stupid endeavor. But for better or worse, I expect we will be seeing some of these space based data centers in the near future. I guess we'll just have to wait and see how economically sustainable they are...