The race to cool the world’s overheating digital infrastructure has taken an unexpected dive… Straight to the ocean floor. As the demand for artificial intelligence (AI) processing, cloud storage, and real-time data grows exponentially, innovators are exploring bold new approaches to address two pressing challenges: energy efficiency and space limitations.
One of the most fascinating, and controversial, solutions making waves is the concept of underwater data centers.
But can data centers really thrive beneath the sea? And could they be strategically deployed near submarine cable landing stations (CLS) to improve latency, boost interconnection efficiency, and offload edge workloads?
Why Explore Under the Sea?
The data center industry’s energy consumption is staggering, estimated to account for nearly 2% of global electricity use, according to the International Energy Agency (IEA). The rise of AI, edge computing, and digital services is expected to increase this figure significantly by 2030.
Meanwhile, Synergy Research Group reports that over 500 data center projects are currently under construction worldwide. Many are located in remote regions like Texas, Iowa, and Oklahoma, offering vast land but exposing facilities to higher risks from natural disasters.
In contrast, nearly 50% of the global population lives within 200 kilometers of a coastline, making the ocean an attractive option for new infrastructure. Coastal megacities, from New York and Tokyo to Dubai and Singapore, are major consumers of cloud and AI services, requiring low-latency connections and vast computing power.
Here’s where the ocean comes in. Seawater provides a massive, naturally cool heat sink, eliminating the need for energy-intensive mechanical cooling systems. Cooling accounts for 30–40% of total data center energy consumption, making underwater solutions a potential game-changer for sustainability.
From Experiment to Reality: Project Natick
The concept of underwater data centers took a leap forward in 2018 when Microsoft launched Phase 2 of Project Natick. The tech giant submerged a 40-foot steel cylinder containing 864 servers off the coast of Scotland, placing it 117 feet below the surface of the North Sea.
The results were promising, with only six server failures incurred over two years, making them eight times more reliable than comparable land-based data centers. Natural ocean cooling also eliminated the need for air conditioning, cutting energy use significantly. Impressively, data transfer latency remained competitive due to proximity to coastal networks.
Yet, despite its success, Microsoft quietly concluded Project Natick in 2024, citing challenges related to long-term maintenance, scalability, and regulatory hurdles.
Still, the project demonstrated that undersea deployments can operate efficiently, with potential reliability advantages due to stable underwater temperatures and reduced exposure to dust and human interference.
China’s Commercial Leap: Hainan Underwater Data Center
While Microsoft stepped back, China surged ahead. In 2023, Chinese company, Highlander, unveiled the world’s first commercial underwater data center off Hainan Island, marking a historic milestone for the industry.
This full-scale facility boasts 1,433 tons of underwater computing hardware, processing capacity equivalent to 60,000 traditional computers, and the ability to process 4 million high-definition (HD) images in 30 seconds.
According to Highlander, by leveraging seawater for cooling, the facility saves 68,000 square meters of land, 122 million kilowatt-hours of electricity annually, and 105,000 tons of freshwater per year.
These environmental benefits are substantial, aligning with China’s broader push for carbon neutrality and technological leadership. Highlander plans to deploy 100 modular units, cementing subsea infrastructure as a potential cornerstone of China’s AI and cloud ecosystem.
Subsea Synergy: The Case for Landing Station Integration
The concept becomes even more compelling when underwater data centers are deployed near submarine cable landing stations, the critical nodes where international internet cables connect to terrestrial networks.
By colocating data centers near these landing stations, latency is minimized, catalyzing improved performance for AI, gaming, and real-time services. Interconnection efficiency also increases by optimizing data exchange between networks. Notably, edge workloads are offloaded, easing the burden on centralized cloud regions.
With over 500 submarine cable systems in operation globally, many of which are concentrated near major population centers, this model offers a scalable pathway to meet data demand sustainably.
China’s Offshore Wind-Powered Vision
Pushing innovation further, China announced plans in June 2025 to develop the world’s first offshore wind-powered underwater data center in Shanghai’s Lingang Special Area.
Led by HiCloud Technology, the EUR 195-million project will launch with a 2.3 MW pilot phase, power usage effectiveness (PUE) below 1.15, and 97% green power utilization, combining subsea cooling with renewable energy.
In its second phase, the facility will scale to 24 MW, providing sustainable computing power for AI, financial services, and high-performance computing (HPC).
Rethinking Hardware: Estonia’s Micro Subsea Data Centers
While megaprojects dominate headlines, researchers at Estonia’s University of Tartu are championing a decentralized, low-cost alternative by transforming discarded smartphones into underwater micro data centers.
The modular units cost just EUR 8 each and have been successfully tested for autonomous marine monitoring. By removing batteries and using external power, they minimize environmental risks.
“Innovation often begins not with something new, but with a new way of thinking about the old, re-imagining its role in shaping the future,” explained Associate Professor Huber Flores, who leads the project.
These micro data centers could complement larger installations by handling localized tasks, such as monitoring ecosystems or providing resilient edge computing in coastal regions.
The Challenges: Hurdles Beneath the Surface
Despite their promise, underwater data centers face significant challenges, including complex construction that demands specialized subsea engineering expertise, difficult and costly maintenance due to the need to retrieve and repair equipment from the ocean floor, and lengthy permitting processes, as environmental assessments can take years to complete.
Moreover, environmental groups have raised concerns about potential impacts on marine ecosystems. Advocates argue that rigorous impact studies are essential before large-scale deployment proceeds.
A Deep Dive into the Future
From Microsoft’s pioneering Project Natick to China’s ambitious commercial ventures, underwater data centers represent a radical reimagining of global infrastructure.
The proximity to population centers, synergy with submarine cables, and significant energy savings offer a tantalizing solution to the tech sector’s growing carbon footprint and capacity limitations. Meanwhile, innovations like offshore wind integration and recycled micro centers expand the potential for sustainable, scalable growth.
Yet, success depends on overcoming engineering hurdles, securing regulatory approval, and safeguarding marine ecosystems.
As global data consumption surges, driven by AI, 5G, and IoT, the ocean floor could become the next frontier for digital infrastructure. Until then, if keeping our digital world cool means going beneath the waves, it seems the industry is ready to plunge in.
