China has shifted underwater data centers from futuristic concept to commercial reality. In the Lin-gang Special Area of Shanghai, the country has launched what it calls the first operational underwater data center in the world. The project carries an estimated cost of 226 million dollars and combines renewable energy with deep sea cooling to push efficiency beyond what land based sites normally achieve.
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Scaling far beyond Microsoft’s Project Natick
The first stage of the Lin-gang facility is already active and generating 2.3 megawatts of capacity. The full build is expected to reach 24 megawatts. That scale places it well beyond Microsoft’s Project Natick, which remained experimental and was discontinued in 2024.
The 35 meter deep installation is backed by major state linked groups including Shenergy, China Telecom’s Shanghai division, and CCCC Third Harbor Engineering. Its operator, Shanghai Hicloud, has begun outlining a far larger plan for offshore capacity that could reach 500 megawatts.
How the underwater system works
Servers are enclosed in sealed, pressure controlled capsules and placed on the seabed. The surrounding ocean acts as the primary cooling medium, which removes the need for traditional chillers. The company claims a power usage effectiveness below 1.15, which is stronger than China’s current data center benchmark and competitive with many hyperscale systems elsewhere.
Developers expect about 95 percent of the facility’s electricity to come from offshore wind. If accurate, the underwater clusters could operate without drawing grid power or consuming fresh water.
The unresolved challenges
Microsoft’s earlier trials demonstrated the practical limits of this concept. Servicing sealed units on the seabed is slow, expensive, and heavily dependent on favorable marine conditions. Replacing failed components or installing hardware upgrades becomes a logistical operation rather than a routine task.
Lin-gang’s operators insist that environmental and thermal impact assessments fall within safe parameters, though independent verification has not yet been published. As with any new infrastructure model, the long term question is not whether it works, but whether it remains sustainable and profitable once the novelty fades.
A signal to the global data and AI industry
If China’s figures hold over the next few years, underwater centers could become a serious option for managing the growing demands of AI workloads. The combination of renewable energy, passive cooling, and dense offshore deployment may appeal to companies seeking lower impact infrastructure. The technology still carries unanswered questions, but the Lin-gang launch marks a clear attempt to move ahead of Western experiments and define a new model for high performance data operations.
