China’s underwater data center project targets 90 % cooling energy reduction

A Chinese maritime-equipment company, Highlander, is preparing to deploy a submerged data center pod off the coast of Shanghai, which aims to reduce energy consumption for cooling by approximately 90 percent compared with traditional land-based facilities. 

The facility is being built as a steel capsule, engineered to be placed underwater and cooled by surrounding ocean currents, eliminating the need for air-conditioning systems or evaporative cooling typical of conventional data centers. The project is scheduled to be installed in mid-October 2025. 

Highlander says that more than 95 percent of the energy powering the underwater facility will be sourced from offshore wind farms, aligning with China’s push for green computing infrastructure. Since server cooling can account for a large share of data-center power consumption, the underwater design is marketed as a way to decouple high-performance computing growth from escalating energy and water demands. 

Despite the projected energy benefits, engineers and marine ecologists caution that the underwater environment poses technical and environmental challenges. Issues cited include corrosion of submerged hardware, the complexity of network connections to the mainland, and the risk of thermal discharge or acoustic vulnerability affecting nearby marine ecosystems. 

While earlier experiments, such as Microsoft’s Project Natick off Scotland, demonstrated the feasibility of underwater server encapsulation, China’s project may represent one of the first commercial-scale deployments offering service to clients, including state-owned entities like China Telecom and a national AI-computing firm.