Why Underwater Data Centers and edge computing Could Be an Investment Opportunity

GJC Team
Dec 28, 2024
4 min read

Could Underwater data centers still be an investment opportunity?

Imagine hundreds of powerful servers humming away—not in a high-rise building or desert warehouse, but beneath the waves of the ocean. Welcome to the world of underwater data centers—a bold and growing area of digital infrastructure. These submerged systems could completely change how we store, process, and protect digital data.

Big names like Microsoft and emerging innovators in China have already tested this idea, showing that it’s not only possible, but potentially more efficient and environmentally friendly. Now, as edge computing, AI, and automation grow in importance, underwater data centers could become a vital part of a smarter, faster global network.

This article explores the investment opportunities, technology, and future of underwater data centers—and why edge computing beneath the sea may be the next game-changing trend.

What is an underwater data center?

An underwater data center is a data storage and processing facility placed in a body of water. The servers and systems are housed in watertight containers and submerged to take advantage of the ocean's natural cooling properties.

In 2018, Microsoft ran an experiment called Project Natick, sinking a pod of 855 servers off the Scottish coast. More recently, China-based HiCloud deployed an operational underwater data center off Hainan Province. Their newest module, added in 2024, includes 400 high-performance servers and is already in use for AI model training, scientific research, and game development.

Why are underwater data centers so appealing?

1. Natural cooling equals energy savings. Land-based data centers need massive amounts of electricity for cooling. Underwater centers stay cool naturally, reducing energy costs and environmental impact.

2. More space near cities. 70% of the Earth is ocean. Underwater data centers can be placed just offshore, close to urban populations, without taking up expensive or crowded land.

3. Renewable energy potential. These centers could be powered by offshore wind, wave energy, or tidal currents—making them greener than traditional setups.

4. Lower hardware failure rates. In Microsoft’s test, server failure rates underwater were eight times lower than in land-based facilities, likely due to more stable environmental conditions.

New wave: underwater edge computing

One of the most exciting future opportunities is combining underwater data centers with edge computing—processing data close to where it’s generated instead of sending it long distances to centralized cloud centers.

What is edge computing? Edge computing allows devices and systems to process data locally—meaning faster results, better performance, and less strain on networks.

Opportunities for edge computing beneath the sea

Think of underwater edge compute farms like underwater aquaculture farms (i.e. mussel beds) —compact, clustered, and able to be deployed, harvested, and serviced in groups. With the miniaturization of hardware, it’s now possible to imagine networks of small, modular edge data pods positioned under the ocean surface, capable of local processing and easier maintenance through robotic “harvesting” or lifting to the surface for repair.

Key benefits of underwater edge computing:

Real-time processing. Underwater sensors and devices can send data to edge nodes for immediate analysis. This is vital for marine research, disaster alerts, environmental monitoring, and more.
Lower latency. Processing data close to where it's generated means quicker reactions—especially important in emergency or mission-critical systems like underwater tunnel construction monitoring or intelligent aquaculture farms.
Efficient bandwidth use. Instead of sending raw data to shore, edge systems can filter and compress what’s truly important—saving power and reducing pressure on communication networks.
Resilient communication networks. Using a mix of acoustic communication, LoRa (long range wireless), and non-terrestrial networks (NTNs) like satellites, these systems can create robust digital infrastructure in remote maritime areas where cables can’t reach.

Underwater edge computing could also provide utility at location including:

Intelligent aquaculture management. Monitor fish stocks, water quality, and feeding systems in real time.
Marine ecological protection. Track marine life and monitor pollution in sensitive ocean zones.
Cultural heritage monitoring. Watch over underwater archaeological sites with minimal disruption.
Disaster response. Use real-time edge systems to detect undersea earthquakes, oil spills, near shore events, and damaged infrastructure.
Scientific research. Perform AI-enhanced data analysis for ocean currents, climate data, or marine biology without needing to transmit large datasets back to shore.

This evolution of underwater technology creates a new investment category: smart, modular, edge-capable underwater data farms that could serve both location specific and wider digital infrastructural use cases.

Challenges and vulnerabilities

Despite the promise, underwater data centers—especially edge deployments—face significant hurdles.

Maintenance complexity. It’s harder to fix submerged tech. Even small systems need robotic tools or lifting mechanisms to service. Designing “harvestable” pods that could be managed in a similar manner to aquaculture farms could be an option.

Connectivity costs. Laying undersea fiber cables is expensive. Without strong communication links, even the smartest edge systems are limited. Innovations in satellite and acoustic networking may help bridge this gap.

Cyber and physical threats. A new study showed that acoustic attacks—using sound waves from underwater speakers—can disrupt or even destroy servers. These attacks are hard to detect and could be launched from far away. Researchers have developed AI tools to detect these sound-based threats early, but it's a real concern for long-term deployment.

Unstable energy supplies. Tidal or wind power isn’t always consistent. Underwater systems need backup solutions to stay online during calm or low-energy conditions.

Where the investment potential lies

This growing field is drawing attention from investors looking for a new opportunity in infrastructure, green energy, and AI.

Where the opportunities could be:

Hardware companies developing modular underwater containers, cables, and robotic tools
Edge computing start-ups creating ocean-ready microservers and AI-powered processors
Clean tech firms focused on offshore wind, wave, or ocean current energy
Cybersecurity providers defending underwater infrastructure from new forms of attack
Aquaculture tech companies using edge AI for smart ocean farming
Disaster response infrastructure providers

China’s HiCloud is already proving that this model works on a commercial scale. Meanwhile, Microsoft’s successful pilot shows that early movers in this space can shape global

standards for undersea cloud computing.

Underwater digital infrastructure

Underwater data centers are no longer just a tech experiment—they’re becoming a new reality. With growing demand for AI, real-time analytics, and sustainable computing, the move toward undersea data centers and edge computing could transform how we think about digital infrastructure.

From faster processing and lower energy use to real-time marine monitoring and other smart applications ocean the benefits could be huge. As technology matures and early experiments give way to commercial rollouts, now may be the right time to consider investing in this ocean-based digital revolution.