UNDERWATER DATA CENTERS
China has achieved what it calls the world’s first fully operational, commercially running underwater AI data center off the coast of Shanghai.
The facility, developed in partnership with HiCloud Technology (also referred to as Hailanyun), features nearly 2,000 servers housed in sealed, submarine-grade capsules submerged in the ocean.
By leveraging the natural cooling power of seawater, it dramatically reduces energy demands cutting cooling costs by up to 90% compared to traditional land-based data centers. The entire system is powered by nearby offshore wind farms, making it highly renewable and energy-efficient.
The $226 million project was officially launched in June 2025, with construction completed later that year and full commercial operations beginning in recent weeks. It supports high-performance AI workloads, including GPU clusters from partners like China Telecom.
For context, the U.S. explored similar concepts through Microsoft’s Project Natick but quietly shelved the initiative in 2024 after successful trials, opting not to pursue large-scale commercial deployment.
This development highlights China’s aggressive push to address the massive energy and cooling challenges of scaling AI infrastructure.
This is an interesting engineering achievement in the AI infrastructure race, though scaling, maintenance, and long-term reliability in a marine environment will be key factors to watch.
