November 2025Alex Hayes
Underwater Data Centers: Innovation or Environmental Risk?
As demand for cloud computing and AI continues to grow, so does the environmental cost of keeping the digital world online. Data centers currently use between 240 and 340 terawatt hours (TWh) of electricity each year, about 1 to 1.3% of global electricity consumption, according to the International Energy Agency (IEA). They also consume large volumes of freshwater for cooling.
To reduce this footprint, some engineers are looking underwater. Underwater data centers, designed to use cold seawater as a natural cooling system, could significantly lower energy consumption and free up land for other uses. Yet the concept raises new questions about marine ecology, maintenance, and long-term viability.
How underwater data centers work
An underwater data center is a sealed capsule filled with servers and communication equipment, connected to the mainland through power and fibre optic cables. The surrounding water acts as a passive cooling system, removing the need for traditional air conditioning, which can account for 45% of a data center’s total energy use. Microsoft’s Project Natick, launched in 2018 off the coast of Scotland, remains the most studied example. The unit, submerged 36 meters underwater, housed 855 servers. After two years of operation, only six failed, a 0.7% failure rate compared with 5.9% in a similar land-based test. The stable underwater environment appeared to improve reliability and reduce maintenance.
Global projects and developments
Interest in underwater data centers has expanded worldwide. In China, Highlander Digital Technology has launched underwater facilities near Hainan Island and Shanghai, reporting potential cooling power reductions of up to 90%.
In the United States, a startup called NetworkOcean has proposed a pilot in San Francisco Bay, though regulators have raised environmental concerns. Across Northern Europe, smaller feasibility studies are exploring ways to connect underwater data storage to offshore wind farms, creating renewable-powered cloud infrastructure.
Market analysis suggests that the global underwater data center industry could grow from USD 1.5 billion in 2024 to more than USD 6 billion by 2033, driven by the need for energy-efficient digital infrastructure.
Potential environmental benefits
Advocates believe underwater data centers could make digital infrastructure more sustainable. By using the ocean’s naturally cool environment, these systems reduce the need for traditional air conditioning, which is one of the biggest energy drains in land-based facilities. The stable underwater temperature also helps maintain consistent performance and reduces stress on equipment.
Because they operate offshore, underwater data centers take pressure off land and freshwater resources and can be positioned near renewable power sources such as wind or tidal energy. If developed responsibly, they have the potential to lower emissions and contribute to the industry’s shift toward cleaner, more efficient data infrastructure.
Challenges and controversy
Despite their potential, underwater data centers remain controversial. Marine scientists warn that even small temperature increases in coastal waters can affect local ecosystems. Submerged infrastructure also faces risks from corrosion, biofouling, and high-pressure conditions, all of which make maintenance expensive and complicated.
Microsoft ended Project Natick in 2024, acknowledging that while the pilot proved technically successful, large-scale commercial rollout would be difficult and costly. Regulatory uncertainty adds another barrier, as offshore zones are tightly controlled and projects must comply with environmental, maritime, and energy regulations.
In Europe, energy planners are also concerned about growing data center power use. Projections suggest that European data infrastructure could consume 150 TWh of electricity by 2030, representing nearly 5% of the continent’s total power demand.
A balanced outlook
Underwater data centers are sparking debate about how technology can evolve responsibly. The experiments show promise in reducing energy use and improving cooling efficiency, while raising questions about long-term ecological effects.
Alex Hayes, Executive Director at LVI Associates said:
The debate around underwater data centers reflects a broader challenge in the technology sector: how to balance innovation with environmental responsibility. The concept demonstrates how creative engineering can reimagine energy use, but it also highlights the importance of considering long-term ecological effects. Even if widespread deployment remains uncertain, the research and design advances emerging from these experiments, particularly in cooling efficiency and renewable integration, are already influencing how traditional data centers are built and operated.
Partnering to build sustainable data center infrastructure
For organisations developing or expanding digital infrastructure, the move toward sustainable design requires expertise that spans engineering, renewable energy, and environmental science. Building greener data systems, on land or under the sea, demands collaboration between specialists who understand both performance and environmental impact.
LVI Associates partners with companies across the energy, data, and environmental sectors to help them hire professionals who can design and manage sustainable infrastructure for the future.
If your organisation is exploring new data infrastructure projects and needs the right technical and environmental expertise, request a call back from LVI Associates to discuss your hiring needs.
