> Geopolitical concerns, infrastructure/power availability, security, since these things are full of incredibly valuable hardware.

The market decides that, not Elon. Do customers want to pay $X for compute in Iceland (or wherever), or do they want to pay $kX for compute in space?

What premium are customers willing to pay for compute in space? I would guess that the premium is actually negative because the quality of computation in space is worse than under the sweet embrace of Earth's atmosphere which provides a natural protection against radiation.