China has flipped the switch on a data center that lives at the bottom of the sea. The underwater data center off Shanghai is now in full operation, and it runs almost entirely on offshore wind. According to Chinese officials, it is the first facility in the world to combine both ideas at commercial scale.
The complex sits 10 meters below the surface in the Lin-gang Special Area. That zone belongs to the China (Shanghai) Pilot Free Trade Zone. Operator Hailanyun, also known as HiCloud, built the project with state partners. The price tag came to 1.6 billion yuan, or about $226 million. Roughly 2,000 servers run inside the submerged capsules, and the site is designed to scale to 24 megawatts. A nearby offshore wind farm supplies the power.
Seawater does the cooling for almost nothing
Cooling is where the underwater approach pays off. Conventional data centers burn 40 to 50 percent of their electricity on air conditioning. Down on the seabed, the surrounding water carries heat away naturally. Consequently, cooling consumes less than 10 percent of the facility’s energy. As a result, the first phase targets a power usage effectiveness of about 1.15. That figure ranks among the best in the industry.
The official numbers are striking. Compared with traditional onshore data centers, the project is designed to use more than 95 percent green electricity. Furthermore, the government says it cuts energy consumption by 22.8 percent. Water use disappears entirely, and land use drops by more than 90 percent. Lin-gang’s administrative committee called the project “a breakthrough in the integrated development of UDC and offshore renewable energy.”
A rehearsal in Hainan, and an AI race in the background
This is not Hailanyun’s first dive. The company opened the world’s first commercial underwater data center off Hainan island in 2023, using the same seawater-cooling principle. The Shanghai site adds the wind-power piece, and its construction wrapped in October before operations ramped up this spring.
The timing is no accident. A recent UN report found that only 32 countries host AI-focused data centers. About 90 percent of that capacity sits in just two: China and the United States. Both are scrambling to secure the energy that AI demands, and they are taking different routes. US tech giants are working on their footprint too. For example, Google just pledged that its data centers will replenish more water than they use by 2030. China, meanwhile, is betting that the ocean floor can host the next wave of AI infrastructure. The race below the waves has officially started.
