On the ground, large-scale data centres are massive facilities filled with racks of servers and storage, redundant power connections, generators, battery banks and enormous cooling systems. An orbital data centre would need to replicate all of this in space.
The proposition sounds absurd on its face, but several factors make it less crazy than it appears. Space offers effectively unlimited cooling via radiative heat dissipation. Solar power is abundant and consistent above the atmosphere. And with the cost of launching mass to orbit falling dramatically thanks to SpaceX's reusable rockets, the economics are shifting.
The timing is notable given the recent drone strikes on AWS Middle East facilities, which demonstrated a vulnerability in ground-based infrastructure that orbital systems would not share.