AI Data Centers: Cooling Goes Under the Sea

A continent that no longer always says yes. In Texas, over 1,800 data center projects are currently awaiting electrical connections, on an ERCOT waiting list that approaches 474 gigawatts of cumulative demand. The figure is staggering but misleading, as a good portion of this demand is phantom. Indeed, developers are multiplying applications to reserve a spot without guarantees of financing or land. Governor Greg Abbott has nonetheless suspended new connections until August 2026, pending an audit conducted by ERCOT and the PUCT. Elsewhere in the United States, local opposition is growing at the same pace as the electrical appetite of artificial intelligence. Some in the sector are therefore choosing to circumvent the obstacle rather than confront it, by diving directly into the ocean. Key points of this article:

• Texas has suspended new electrical connections for data centers, with staggering but partly phantom demand.
• China has made an impression with the launch of the HiCloud underwater data center, using seawater for innovative cooling.

Seawater, the new star of data center cooling
China has led the way first, and the scale of the project is impressive, as is often the case in Xi's country. Like this construction site off the coast of Shanghai, in the special Lingang zone, a gigantic HiCloud underwater data center that entered full commercial operation in the week of May 20, 2026, according to DataCenterDynamics.
However, contrary to what one might read here or there, the installation is not floating: its modules are submerged at about 35 meters deep. The project, estimated at $226 million for 24 megawatts of capacity, is powered by offshore wind and pumps seawater directly into its cooling circuits rather than refrigerating freshwater. Claimed result: a PUE of less than 1.15, representing a gain of about 23% compared to a conventional land site.
A precedent already existed off Hainan, at a site distinct from that of Shanghai: capsules submerged at 35 meters deep have been operating there since November 2023, thanks to water that never exceeds 24.5 degrees year-round, for an estimated energy efficiency gain of between 40% and 60%. Singapore is also following suit with the Keppel project, a four-story data center set to open in 2028, which is truly floating on the surface.
In summary: HiCloud in Shanghai is underwater, resting on the seabed. The floating one is the Keppel project in Singapore.

Immersion, air, seawater: a typology that also speaks to Bitcoin mining
Not all cooling systems are created equal, far from it.
Air cooling, the most common method, generally caps out between 20 and 40 kilowatts per rack according to manufacturers, which is largely insufficient for the most power-hungry AI chips that today can reach up to 100 kW.
Immersion cooling, which submerges components in a dielectric liquid that conducts heat but not electricity, significantly pushes this limit without changing the architecture. This is a technique that Bitcoin mining farms have been practicing for years on their ASICs, long before AI giants took an interest in it.
Seawater cooling goes even further: systems known as SWAC (seawater air conditioning) typically operate at around 15% of the electrical consumption of a conventional air conditioning system of equivalent power, which explains the sudden enthusiasm of operators for coastlines and seabeds.
Bitcoin miners, unwitting pioneers of the oceanic shift
The connection between Bitcoin mining and AI infrastructure is not new, and it makes perfect sense here.
Bernstein already pointed out in May that Bitcoin miners have an asset that AI covets: over 27 gigawatts of electrical capacity, a figure that aggregates installed capacity, pipeline, and projects claimed by the sector in the United States, already connected sites, and expertise in high-density cooling acquired on the backs of ASICs.
Moreover, the contract timeline confirms this. IREN signed a $3.4 billion contract with Nvidia for AI cloud on May 7, 2026, six months after already signing a $9.7 billion contract with Microsoft on November 3, 2025, the first data center of which was delivered and accepted in August 2026.
Riot Platforms announced on January 16, 2026, a first data center lease with AMD at its Rockdale site in Texas: 25 MW delivered in two phases between January and May 2026, with an option to extend up to 200 MW. These companies are therefore not starting from scratch in the face of the thermal challenge that is pushing other players towards the ocean today. They have fine-tuned their cooling circuits for years, a know-how that is now worth its weight in gold in the race for gigawatts.
However, seawater is not just an engineering issue. It is also increasingly a way to escape a power dynamic that has become unfavorable on land. A Gallup poll conducted in March 2026 already showed that 70% of Americans oppose the construction of a new data center near them, a figure that partly explains why Singapore, China, and soon other jurisdictions are seeking their megawatts at sea. But the ocean does not make opposition disappear: it displaces it. And above all, it does not solve the real bottleneck in the U.S., which is the connection to the electrical grid. Texas, which dreamed of becoming the Silicon Valley of electricity, must deal with an audit whose outcome remains uncertain before the end of the year.
The underwater bet also has its unknowns
Microsoft closed the first chapter of this story even before China opened its own. Its Project Natick, two years submerged off the Orkneys, demonstrated a failure rate of servers well below that of a comparable land site (6 failures versus 8). However, the project was abandoned: submerged servers cannot be easily upgraded or repaired, while AI hardware changes generation every 12 to 18 months. It is difficult to remain competitive when each intervention requires an underwater operation.
Less technical questions also arise. The rejection of heat into the water worries marine biologists, who fear pockets of thermal pollution.

As installations multiply along the coasts, biofouling—the accumulation of algae and shellfish on hulls—degrades cooling efficiency and incurs costly maintenance. Coastal waters remain regulated areas: shipping routes, fishing, cables, military or protected zones, each project must obtain its own permits, country by country. The ocean shifts the problem of land tenure but does not eliminate the bureaucracy.

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