China taps offshore wind, subsea data centres to ease AI computing bottleneck

China is looking to the ocean to power its artificial intelligence computing ambitions, as it seeks new ways to meet soaring demand for computing power through underwater data centres in eastern and southern China. Shanghai’s Lingang Special Area, a government-designated free-trade zone designed to attract advanced manufacturing and hi-tech industries, recently saw an underwater data centre (UDC) begin operation, marking the first such facility in the world to be directly linked to an offshore wind farm, according to a report by China’s state broadcaster CCTV last week. The UDC, located 10 kilometres off Shanghai’s eastern coast and 10 metres under water, was built by Shanghai HiCloud Technology, a subsidiary of Shenzhen-listed marine navigation and communication equipment company Highlander. With a total investment of 1.6 billion yuan (US$232.4 million) and planned capacity of 24 megawatts, it is viewed as a key pilot project to explore the technical and commercial viability of subsea data centres linked to onshore cloud and telecoms infrastructure. The company said the cluster would be used to power multiple applications including AI, embodied intelligence and autonomous driving. The company said the cluster would be used to power AI scenarios, as well as embodied intelligence and autonomous driving. The coastal project in Shanghai comes amid increasing efforts by China to look beyond land – to the seas and even skies – to boost its computing power supply amid surging demand for AI. It follows an earlier project to build a UDC off the southern island province of Hainan, also initiated by Highlander. The combination of submarine data centres and offshore wind power could help Shanghai solve computing bottlenecks as AI workloads demand high-efficiency, low-latency local computing power – and Shanghai has limited land resources, according to a research note by the Shanghai Academy of Development and Reform, a municipal government-backed think tank. The move also follows a wider wave of interest in submerged computing hubs globally. In the US, Microsoft had been exploring similar possibilities for years through its Project Natick, a research project on UDC, before it said in 2024 that the project was no longer active amid concerns over its operational feasibility. The facility that HiCloud built in Hainan, which became operational last year, was installed in a 1,300-ton underwater data cabin – equivalent to the weight of 1,000 passenger cars. The first phase of the UDC project, which finished construction in 2023, would save 26,000 tons of water and 3.4 million kilowatt-hours of electricity per year, while reducing carbon emissions by about 2,720 tons compared with traditional land data centres of the same size, Li Jiawen, deputy general manager of HiCloud, told Chinese media at the time. “HiCloud has demonstrated the comparative advantages of submarine data centres through commercial operation in Hainan,” according to analysts from the Shanghai think tank. But they also pointed out difficulties faced in building subsea facilities, as the technology was still in the very early stage. The project faced challenges such as lack of standards, operational and maintenance difficulties, and economic viability, they said in the report.