AI Companies Turn to the Ocean to Cool and Power Data Centers

The artificial intelligence boom is driving unprecedented demand for data centers, raising concerns about their energy consumption, water use and carbon footprint. In response, several companies are testing whether housing servers underwater or on floating platforms at sea could improve cooling efficiency while using less fresh water and land than conventional onshore facilities.

Microsoft explored the idea first, launching a research project in 2015 and sinking a waterproof data center containing 864 servers off Scotland's Orkney Islands in 2018. After two years, the company reported that the submerged servers failed at about one-eighth the rate of comparable land-based servers, which it attributed to less exposure to oxygen, humidity and temperature swings, and less physical disturbance from maintenance staff. Microsoft ended the project in 2024 and chose not to build more underwater data centers, without stating why; outside analysts have pointed to regulatory hurdles such as environmental permitting and the difficulty of upgrading sealed hardware.

Other developers have moved ahead since. A wind-powered underwater data center in Shanghai, reported to be the world's first, began full commercial operation in May 2026 after a $226 million build; it cools servers with seawater and uses at least 30% less electricity than a conventional facility. Near Yokohama, Japan, a floating platform of shipping-container data centers powered by solar panels and batteries opened in 2025, with testing planned through March 2027. Singapore's Keppel began building a four-story floating, seawater-cooled data center in 2026, due to open in 2028, and South Korea has since 2025 been planning an underwater facility near Ulsan designed to house more than 100,000 servers.

The main environmental concern is the warm water discharged after cooling servers, which can affect oxygen levels, pH and marine life nearby; HiCloud, the engineering contractor for an underwater data center in Hainan, China, has reported a temperature increase of less than 1 degree Celsius in the surrounding water.