An offshore underwater data center linked to wind power near Shanghai’s Lingang Special Area has entered operation with a 2.3-megawatt demonstration phase, a February 14, 2026, project update on China’s Ministry of Transport website says. The full development is planned for 24 MW across two phases.
The installation combines a vertical subsea data compartment, seawater cooling and a direct electricity connection to offshore wind generation. The update lists total project investment of 1.6 billion yuan.
Shanghai’s State-owned Assets Supervision and Administration Commission identifies Shanghai INESA and Shanghai HiCloud Technology as collaborators. Its October 24, 2025, announcement records a completion event on October 21 and says INESA installed a computing cluster using domestically produced technology.
The data compartment is reported to sit roughly 10–15 meters below the sea surface in a vertical cylindrical structure anchored to the seabed.
Seawater cooling and a direct wind connection
Shanghai HiCloud Technology describes a cooling system in which refrigerant absorbs heat from server exhaust air, evaporates and rises to an upper cooling section. Heat exchangers transfer the heat to seawater, allowing the refrigerant to condense and return under gravity. The company describes this heat-transfer circulation as operating without a pump to drive it.
The February project update specifies a design power usage effectiveness, or PUE, of no more than 1.15. PUE compares total facility energy use with the energy consumed by IT equipment. A value closer to one indicates that less energy is used by cooling, power conversion and other supporting systems. The update identifies 1.15 as a design specification rather than a measured operating result.
The same update states that green electricity supplies more than 95% of the facility’s power. It describes dedicated subsea cables carrying electricity directly from offshore wind generation to the data compartment. The supply-share claim does not establish continuous operation on wind power alone.
Earlier underwater computing trials
Microsoft previously tested underwater data centers through Project Natick, including a 105-day Pacific Ocean deployment in 2015 and a capsule placed off Scotland’s Orkney Islands in 2018 for a two-year trial.
Microsoft reported lower server failure rates in its underwater trial than in a land-based comparison. Its researchers proposed that the capsule’s dry nitrogen atmosphere and the absence of human handling helped explain the difference. Those findings concerned Microsoft’s test installation.
The Scotland capsule was retrieved for inspection after the trial. Microsoft said deployment and retrieval each took a full day and required unusually calm seas.
Noelle Walsh, identified at the time as head of Microsoft’s Cloud Operations + Innovation division, said, “I’m not building subsea data centers anywhere in the world.” Microsoft also said it would continue using Natick as a research platform to explore data center reliability and sustainability.
Panthalassa CEO Garth Sheldon-Coulson describes another approach: floating systems that use wave energy to power AI computing at sea.
