Key Points
- China has launched the world’s first commercial underwater data center in Shanghai.
- The $226 million project uses deep-sea cooling and offshore wind power for efficiency and sustainability.
- It is significantly larger than Microsoft’s previous experimental Project Natick.
- Major challenges include the high cost and difficulty of maintenance, upgrades, and repairs.
China is taking its digital infrastructure underwater, turning an idea into a commercial reality. The Lin-gang Special Area in Shanghai is now home to what China calls the world’s first underwater data center.
This $226 million project uses renewable energy and the natural cooling of the deep sea to be more efficient and sustainable. The first stage of the Lin-gang facility is now running, providing 2.3 megawatts of capacity. The developers say that when fully built, it will reach 24 megawatts. This would make it much larger than Microsoft’s Project Natick, which was mostly an experiment and was shut down in 2024.
Major state-backed companies, including Shenergy, China Telecom’s Shanghai branch, and CCCC Third Harbor Engineering, are supporting the project. Its operator, Shanghai Hicloud, already has a plan for a much bigger 500-megawatt expansion in offshore locations.
Technically, the method is straightforward: servers are placed inside watertight capsules on the seabed. The ocean’s natural cold water acts as a coolant, so traditional chillers aren’t needed. The company claims this setup achieves a power usage effectiveness (PUE) below 1.15, which is better than China’s current standard and many land-based data centers.
Supporters of the project say the underwater design cuts the energy needed for cooling and allows it to rely almost entirely on renewable sources. The developers estimate that about 95% of the facility’s electricity will come from offshore wind, meaning it won’t need grid power or freshwater. If these numbers are correct, the site could be a big step toward sustainable computing.
However, there are clear challenges. Microsoft’s previous experience has shown that servicing, upgrading, and replacing parts are difficult. Each capsule is pressurized, sealed, and coated to prevent corrosion, so once it’s underwater, getting to it is expensive and slow.
The Lin-gang developers say the impact on marine life and water temperature is within acceptable limits, but this hasn’t been independently verified yet.
Like Microsoft’s project, the big question isn’t whether the system can work, but whether it can be sustainable and profitable in the long run. If the results match the early promises, China’s approach could change how global companies deploy AI tools and manage large-scale data workloads.
