In an effort to curb the massive energy consumption of modern computing, a Chinese company is preparing to submerge a commercial data center in the sea off the coast of Shanghai. The project, led by maritime equipment firm Beijing Highlander Digital Technology in partnership with state-owned construction companies, aims to use the natural cooling power of ocean currents to slash the electricity required to keep servers from overheating, a significant and growing challenge in the digital age. The facility is scheduled for deployment in mid-October 2025 and will be one of the world’s first commercial underwater data centers.
The explosive growth of artificial intelligence and cloud computing has created a voracious appetite for data processing, leading to a global surge in the construction of power-hungry data centers. A substantial portion of their energy usage is dedicated not to computation itself, but to cooling the vast arrays of servers that generate immense heat. By moving this infrastructure from land to the seabed, developers hope to create a more sustainable and efficient model. This subsea approach leverages the consistently cold deep-water temperatures, aiming to reduce the reliance on conventional, energy-intensive air conditioning and water evaporation systems that are the industry standard on land.
A Subsea Solution to Surging Demand
The fundamental principle behind the underwater data center is simple yet powerful: water is a far more effective coolant than air. Land-based data centers must expend a tremendous amount of energy to maintain a controlled, cool environment, with cooling systems often accounting for a large fraction of their total electricity bills. As global reliance on data grows, so does the associated carbon footprint. In response, governments and technology firms are increasingly seeking innovative solutions to mitigate this environmental and financial cost. The Chinese government, for instance, is actively pushing for its data center operators to lower their carbon emissions, creating a favorable environment for alternative designs.
Highlander officials claim their underwater design can achieve dramatic efficiency gains. According to Yang Ye, a vice president at the company, undersea facilities can save approximately 90% of the energy typically consumed for cooling. The system works by dissipating the heat generated by the servers directly into the surrounding seawater through a heat exchanger, allowing the ocean currents to carry it away. This passive cooling method nearly eliminates the need for mechanical chillers. To further enhance its green credentials, the Shanghai project is expected to draw about 95% of its power from renewable sources, primarily nearby offshore wind farms.
The Shanghai Commercial Deployment
On a wharf near Shanghai, workers have been applying the final touches to the large, yellow steel capsule that will house the servers. This pod is engineered to withstand the immense pressure and corrosive effects of the marine environment. It is the core of what Highlander intends to be a fully commercial service, a key distinction from previous experimental deployments. The company has already signed on significant clients, including the state-owned telecommunications giant China Telecom and a government-backed AI computing firm, signaling confidence in the project’s viability.
This initiative follows an earlier, smaller-scale pilot project that Highlander launched in 2022 off the coast of Hainan province. That facility, which is still in operation, received 40 million yuan ($5.62 million) in government subsidies and provided crucial experience for the more ambitious Shanghai deployment. An engineer involved with the Shanghai project acknowledged that the construction challenges were greater than initially anticipated, underscoring the complexities of pioneering this new infrastructure frontier.
Technical Innovations and Maintenance
Protecting the high-tech equipment from the harsh saltwater environment is a primary engineering challenge. The steel capsule holding the servers is coated with a specialized protective layer containing glass flakes to prevent corrosion. While submerging the servers solves the cooling problem, it creates a new one: maintenance. Physical access to servers for repairs or upgrades is straightforward on land but becomes a logistical hurdle on the seabed. To address this, the Chinese design incorporates an elevator that will connect the main underwater pod structure to a segment that remains above the water’s surface, allowing maintenance crews to access the servers when necessary. This feature is critical for a commercial operation where downtime must be minimized.
Global Precedents and Chinese Ambitions
The concept of placing data centers in the ocean is not entirely new. Microsoft famously pioneered the idea with its “Project Natick,” which saw a container-sized data center deployed on the seafloor off Scotland’s Orkney Islands from 2018 to 2020. The experiment was widely considered a success. Microsoft reported that the servers inside its sealed, nitrogen-filled cylinder experienced a failure rate just one-eighth that of a comparable land-based control group, suggesting the stable, cool, and oxygen-free environment was highly beneficial for the hardware’s longevity.
Despite these promising results, Microsoft retrieved its pod in 2020 and has not pursued a commercial version of the technology. While the company has not publicly detailed its reasoning, experts speculate that concerns over construction costs, the complexity of subsea operations, and the rapid pace of hardware evolution—which makes accessing and upgrading servers a frequent necessity—likely played a role. The Shanghai project is therefore a significant step forward, aiming to prove that underwater data centers can be not just technically feasible, but also commercially practical and scalable. China’s government backing provides a crucial impetus that was absent in Microsoft’s more research-oriented trial.
Overcoming Deep-Water Challenges
While the benefits are compelling, significant obstacles must be overcome before data centers can be widely deployed on the seabed. Shaolei Ren, an expert from the University of California, Riverside, has noted that such projects are currently focused on demonstrating technological feasibility and face major hurdles in construction and environmental impact. Laying the high-speed fiber optic cables that connect an offshore data center to the mainland is a more complex and potentially costly process than for traditional facilities.
Furthermore, the ecological impact of these installations requires careful study. While Highlander reported that its Hainan trial showed surrounding water temperatures remained within acceptable ranges, experts caution that more research is needed to understand the long-term effects of heat discharge from potentially large-scale deployments on local marine ecosystems. There are also novel security concerns; researchers have reported that underwater facilities could be vulnerable to attacks using sound waves. For these reasons, analysts believe that for the foreseeable future, underwater data centers will likely complement, rather than replace, conventional land-based sites, serving niche roles where the unique benefits of energy savings and renewable power integration are paramount.