China is trying to solve its water- and energy-consuming data centers by moving them under the sea. Shanghai Hailanyun Technology (HiCloud), working with several government agencies, launched what it calls the world’s first wind-powered underwater data center in May 2026. It lies about 32 feet below the ocean surface, off the coast of Shanghai’s Lin-gang Special Zone, surrounded by a wind farm of more than 50 turbines. It hosts approximately 2,000 servers, which constitutes a small to medium-sized data center. Larger hyperscale data centers can accommodate at least 5,000 servers. At full capacity, the HiCloud facility will operate at 24 megawatts. If it operated continuously for a year, it would consume the same electricity as 20,000 American homes. Engineers hope the $228 million project will solve three critical data center problems: electricity, cooling and land use.
Data centers need huge spaces to house servers, cooling systems, electrical infrastructure, backup systems and other infrastructure. Land use explains why more than two-thirds of the 1,500 planned data centers in the United States are in rural areas. The Lin-gang data center will have a minimal land footprint, despite its 31 million neighbors. Because it is in the ocean, the data center will stay cool using minimal fresh water, which is important because an extremely small percentage of Earth’s water is drinkable. Cooling the oceans also helps reduce energy consumption. For comparison, terrestrial data centers use up to 40% of their energy to stay cool. This potential partly explains why HiCloud recently signed a deal to work on a new 500-megawatt underwater data center.
China’s first underwater data center shows what could happen next
HiCloud has previous experience in underwater data centers. The company launched a group of modules off the coast of Hainan province in 2023. They are not powered by wind energy, but they are designed the same way as the new installation to prevent moisture and oxygen from entering the interior while resisting underwater pressure. HiCloud claims the installation saves around 26,000 tonnes of water and enough electricity to reduce carbon emissions by the equivalent of removing 600 cars from the road for a year.
Introducing anything into an underwater ecosystem can have unexpected effects on wildlife. When seawater cools the servers, it carries heat lost to the surrounding water. Related studies show that thermal discharges from power plants can change oxygen levels, pH, and sediment composition, reducing the number and variety of creatures that live nearby. HiCloud monitors the water in the Hainan data center. A spokesperson told People’s Daily that the water temperature rose by less than one degree Celsius around the facility. The company says schools of fish congregate around the modules, using them as shelter from stronger currents.
Microsoft’s underwater data center experience helped inspire HiCloud
The founder of HiCloud’s parent company, Highlander, was inspired by a Microsoft underwater data center experiment. The software giant launched Project Natick off the coast of Scotland in 2018. Microsoft operated 855 servers without human intervention for more than two years. Only six of the servers went down. At the same time, Microsoft had 135 terrestrial servers meeting the same processing needs and eight of those servers failed. The Microsoft team says the sealed environment reduces temperature fluctuations, keeps oxygen out, and eliminates human interference.
The new HiCloud facility will face external challenges in the ocean. Seawater can cause faster corrosion of the installation and the underwater cabling that feeds it. There is also constant pressure, which affects durability and waterproofing. It will also be more difficult to maintain and replace equipment. When Microsoft axed Project Natick, the capsule was covered in marine vegetation like algae, barnacles, sea anemones, and sea urchins. Microsoft has not reported any issues. The team brought the pod back to shore, then pressure washed the exterior. It is unclear to what extent China’s underwater data centers will be affected by wildlife, as they will operate for 25 years.
