Beril Canakci
12 June 2026•Update: 12 June 2026
China has launched the world’s first commercial wind-powered underwater data center off the coast of Shanghai, as demand for computing infrastructure from the country’s AI sector continues to grow.
The Shanghai Lingang undersea data center is located approximately 10 kilometers (6.2 miles) offshore in Shanghai’s Lingang Special Area, a special economic zone on the city’s southern edge. It is a joint project between HiCloud Technology, a private engineering contractor specializing in subsea infrastructure, and China Communications Construction, a state-owned enterprise.
The facility was officially launched in June 2025 and began full commercial operations in May.
The facility has a total capacity of 24 megawatts—equivalent to the electricity needs of roughly 20,000 households. Power is supplied by offshore wind turbines.
How it works
Underwater data centers are sealed server pods placed on the seabed. Rather than using conventional air conditioning, the Lingang facility uses seawater as a natural coolant, circulated through a copper-pipe heat exchange system. The approach reduces electricity consumption and eliminates freshwater use in the cooling process.
Data centers require significant energy not only to run servers but also to keep them cool. Cooling accounts for a substantial share of total energy use in conventional land-based facilities, making alternative methods an active area of research and development in the industry.
The United Nations University Institute for Water, Environment and Health said on June 3 that water consumption by data centers could rise to 9.3 trillion liters a year by 2030 as AI demand increases.
Shanghai’s AI infrastructure demand
Shanghai has emerged as one of China’s main AI hubs, home to companies working in large-scale machine learning, autonomous vehicles, biotechnology, and advanced manufacturing. The city’s growing concentration of computing-intensive industries has increased demand for data center capacity with low latency—meaning minimal delay between a user’s request and the server’s response—and high processing density.
The Lingang project is positioned as a response to that demand, combining offshore renewable energy with AI-focused digital infrastructure. Chinese engineers have described it as a potential model for future computing systems.
Microsoft’s earlier experiment
The concept of underwater data centers is not new.
Between 2018 and 2020, Microsoft ran an experimental project called Project Natick, sinking a pod containing 855 servers to the seabed off the Orkney Islands in Scotland.
The trial ran for two years and found that the underwater servers experienced lower failure rates than comparable land-based machines.
However, in June 2024, Microsoft confirmed it had closed Project Natick and would not pursue underwater data centers as a commercial product. Industry experts described the concept as technically viable but difficult to scale economically.