AC hinese tech firm is preparing to submerge a pod of servers off the coast of Shanghai. The underwater data center, set to launch in mid-October, could mark a turning point in sustainable technology—but experts warn of major ecological and technical challenges ahead.

On a wharf near Shanghai, engineers are putting finishing touches on a large yellow capsule that will soon rest beneath the sea. The structure is being developed by maritime equipment company Highlander in collaboration with state-owned construction firms.

“Underwater operations have inherent advantages,” explained Yang Ye, vice president of Highlander. He said the project could save up to 90 percent of the energy typically used to cool servers.

By using naturally cold ocean currents instead of traditional air or water cooling, these undersea data centers aim to drastically cut the carbon footprint of modern computing—especially as artificial intelligence continues to drive massive power demands.

While the concept isn’t entirely new—Microsoft tested an underwater data center off Scotland in 2018—the Chinese initiative is among the first commercial deployments of its kind.

The Shanghai facility will serve major clients, including China Telecom and a state-owned AI computing company, and forms part of Beijing’s broader push to lower the environmental impact of data infrastructure.

Microsoft’s experiment concluded in 2020, having proven the idea’s feasibility, but the tech giant did not pursue it commercially. Experts say China’s government support, including a 40 million yuan ($5.62 million) subsidy for Highlander’s previous Hainan project, is giving the concept new momentum.

Technical hurdles beneath waves

Despite the promise, building underwater data centers is no small feat. “The actual completion of the underwater data center involved greater construction challenges than initially expected,” said Zhou Jun, an engineer for the Shanghai project.

The capsule is assembled onshore in sections, then lowered into the sea. Most of its energy will come from offshore wind farms, with Highlander claiming that over 95 percent of the power used will be renewable.

A protective glass-flake coating shields the steel structure from corrosion, and a small elevator connects the main capsule to a section above the water for maintenance access.

However, experts like Shaolei Ren of the University of California, Riverside, caution that connecting underwater servers to mainland internet networks remains technically complex. He also noted studies suggesting sound wave-based attacks could potentially target submarine data centers, raising new cybersecurity concerns.

Ecological concerns and marine unknowns

Beyond technical hurdles, scientists are also examining the environmental impact of such facilities.

Andrew Want, a marine ecologist at the University of Hull, warned that the heat emitted by underwater data centers could disrupt local ecosystems—attracting some species while driving others away.

“These are unknowns at this point – there’s not sufficient research being conducted yet,” he said.

Highlander maintains that a 2020 independent assessment of its earlier project near Zhuhai found no significant temperature increase in nearby waters. Yet experts like Ren insist that large-scale deployments could still pose risks: “For megawatt-scale data centers underwater, the thermal pollution problem needs to be studied more carefully.”

While the concept is still in its early stages, experts believe underwater data centers could complement traditional facilities, particularly in areas where land or cooling resources are limited.

“They’re probably not going to replace existing traditional data centers,” Ren said, “but can provide service to some niche segments.”

For now, China’s upcoming launch off Shanghai represents both a technological milestone and a test of environmental responsibility in the race to power the world’s digital future.