New Chinese underwater data center potentially has 90% less cooling power costs

A Chinese company is preparing to deploy an underwater data center off the coast of Shanghai that it says could reduce energy use for cooling by up to 90%, part of efforts to lower the carbon footprint of the country's fast-growing digital infrastructure.

The project, developed by maritime equipment firm Highlander with state-owned partners, will submerge a steel capsule containing servers in mid-October. Ocean currents will keep the servers at a stable low temperature, replacing the energy-intensive cooling methods used by land-based facilities, says Science Alert.

"Underwater facilities can save approximately 90% of energy consumption for cooling," said Yang Ye, vice president of Highlander. The company says the Shanghai unit will draw most of its power from nearby offshore wind farms, with more than 95% expected to come from renewable sources.

Global demand for data centers has surged with the rise of artificial intelligence and cloud services, driving up power consumption. China's government has been pushing operators to improve efficiency and reduce emissions, including through subsidies. Highlander received 40 million yuan ($5.62 million) for a similar pilot project launched in 2022 in Hainan province.

The concept has been tested elsewhere: Microsoft ran a trial off the coast of Scotland between 2018 and 2020, but did not pursue commercial deployment. Researchers caution that challenges remain, including construction, connectivity, maintenance and potential environmental impacts from heat discharge.

Highlander says its earlier trial showed surrounding waters remained within acceptable temperature ranges, but experts note more study is needed before large-scale deployment.

Analysts expect underwater data centers to complement, rather than replace, conventional land-based sites, serving specific needs where energy savings and renewable integration are priorities.