China has reportedly launched the world’s first commercial underwater data center in Hainan on Tuesday. This marks a major step in the country’s push to expand its ‘blue economy.’
The project, located off Lingshui county, places data servers inside a massive 1,433 US tons underwater cabin—roughly the weight of 1,000 passenger cars.
After completing its first construction phase this year, the site is now operational, hosting digital services ranging from restaurant recommendations to travel applications.
The underwater center represents one of the world’s first commercial-scale deployments of submerged data infrastructure. It aims to reduce the heavy energy costs associated with traditional land-based data centers, which are struggling to keep up with soaring demand driven by artificial intelligence and cloud computing.
Natural cooling from ocean currents
Traditional data centers rely on power-hungry cooling systems to prevent overheating. The new system, however, uses seawater as a natural coolant.
“We put the entire data cabin in the deep sea because seawater can help cool down the temperature,” explained Pu Ding, project manager at Shenzhen HiCloud Data Centre Technology, in an interview with Financial News.
“Compared to land-based data centres, data centres under the sea can reduce energy consumption needed for cooling, helping to lower operational costs,” he added.
Each submerged cabin sits 35 meters (115 feet) below the surface and holds 24 server racks capable of hosting up to 500 servers. The project’s design takes advantage of the ocean’s stable temperatures to maintain efficiency while minimizing environmental impact.
A key project in Hainan’s free-trade zone
The underwater data center is part of Hainan’s larger effort to attract global investors and develop its free-trade zone into a major tech and maritime innovation hub.
Under the province’s 14th Five-Year Plan, Hainan aims to build a full subsea network of 100 underwater data cabins. This network will support industries tied to marine research, digital services, and smart manufacturing, solidifying Hainan’s role in China’s expanding blue economy.
The project also benefits from new policies that allow full foreign ownership of data centers and telecom services in Hainan, Beijing, Shanghai, and Shenzhen. This move comes as China seeks to boost international partnerships and compete in global data infrastructure development.
“This policy update is a response to mounting global demand for data centre services fuelled by advances in generative AI and cloud computing,” stated Giulia Interesse, editor at China Briefing, published by consulting firm Dezan Shira and Associates.
“By opening its borders to full foreign ownership, China is aiming to attract multinational tech giants eager to tap into its market potential.”
A different path from Microsoft’s Project Natick
China’s Hainan initiative stands in contrast to earlier experiments by Western companies. Microsoft launched Project Natick in 2014, submerging an experimental data center off Scotland’s coast in 2018.
The system contained 855 servers and operated underwater for two years, proving the technical feasibility of such designs.
However, Microsoft confirmed in 2024 that the project was no longer active, choosing not to commercialize it.
Now, China’s Hainan operation has taken the lead, transforming a concept once tested by a tech giant into a real-world commercial service.
With this launch, China becomes the first nation to operationalize an underwater data center at scale, integrating it into economic planning and global investment strategies.