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What are you smoking? Firstly, there's hardly any space data other than scientific probes by various space agencies, and communication satellites operated by both public and private entities. The latter, by their very nature, need to communicate with the ground.
Secondly, the latency difference would depend largely on where both the datacenter satellite and the source of the space data are located. In LEO, space datacenters would be less consistent in their latency than ground stations because they're orbiting the Earth roughly every 90 minutes (or you'd have to be constantly passing the data around to different space datacenters to keep latency somewhat consistent, but this data transfer would likely kill any gain you got from the latency reduction and then some).
This is not true and hasn't been true for over a decade. There are ~13,000 of satellites in space now. They are constantly collecting data and monitoring events. Even in the 2010s Planet Lab was able to scan every part of the Earth multiple times a day, and this was with a fleet of a few hundred satellites. Starlink now processes large amounts of internet traffic, set to increase enormously. Video sensors lidar sensors optical sensors infrared sensors synthetic aperture radar sensors particle detectors magnetometers gravitometers the works. All these systems are constantly collecting data. All these satellites are at risk of running into each other, or colliding with space debris, or have regular system checks that get reported back to Earth. And the number of satellites in orbit is going exponential as SpaceX and Rocket Lab make the costs to launch cheaper than ever before.
Even just the imagery needs are enormous. Planet Labs for example processes something like 30 Terabytes of imagery a day. I don't know how they do it, but it's not hard to imagine the constraints. Even the most basic Planet Labs Dove 1 and Dove 2 CubeSats from the early 2010s didn't report every image they took back to ground antenna networks. The stress on bandwidth would be enormous. What would happen even then is that each CubeSat would take a multitude of images and algorithmically select the best with which to phone home. Now consider that as a satellite moves across space, images of the same location on Earth are taken from different satellites. Deciding which images to send (which videos, which reports, which temperature data, etc.) can become a giant coordination problem. And there's no special reason why that wouldn't be done in space: it's simply a question of convenience.
A datacenter is just a warehouse of computers. There's nothing special about it. Datacenters process and manage data storage and dissemination for other computer. This is already happening in space. In a trivial sense we already have datacenters in space. We just don't call them that, because the ones in space are not as large and generalized as the ones we have on Earth. But there's not really any serious debate that datacenters in space are going to grow. The question is, at what scale? Will orbit-bound datacenters grow into a significant computer industry, or will they stay at this trivial level? Will they ever be efficient for processing data that originates from earth, or will they only be useful for data that originated in space? These are open questions.
This is basically how Starlink already works. When you connect to Starlink it switches which satellite you're connected to every few minutes.
With Starlink or a similar system I imagine it would be easy to beam a lot more of it down.
Yes, which is why putting them in space has very limited advantages that rarely outweigh the benefits of a terrestrial datacenter.
Starlink works by just handing off a connection/stream to a different satellite. It doesn't need to pass off 30 terabytes of image data that are already partially processed, it's a fundamentally different problem.
You mean data-collecting satellites could outsource their data processing to specialized satellites that coordinate intense computing problems for them?
Nope, at least not easily. But they can outsource their data transmission (which takes orders of magnitude less energy and computing power than actually processing it) to Earth.
I really don't think this was the gotcha you thought it was.
A satellite that coordinates transmission scheduling is functionally a data center. It probably even runs SQL. We’re simply debating how far it will scale.
Starlink is useful because it allows internet from anywhere in the world. It needs a certain minimum amount of computing power onboard to be able to accomplish this. A 5G cell tower, by constrast, only provides internet in a limited radius around the tower.
Building a datacenter in space offers no significant economic, legal, or technological advantages over a datacenter on the Earth.
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