Plans to scale capacity to 24MW over two phases
The first commercial underwater data center (UDC) project powered by an offshore wind farm has been launched in Shanghai, China.
The project is set to be developed by HiCloud, a division of Highlander, which has previously developed UDC modules off the coast of Hainan Province, China. According to local reports, HiCloud will invest an initial 1.6 billion yuan ($222.8 million) into the project.
HiCloud inked a tripartite cooperation agreement with the administrative committee of the Lin-gang Special Area of China (Shanghai) Pilot Free Trade Zone and Shanghai Lingang Special Area Investment Holding Group Co. to develop the project.
The Shanghai Lingang UDC project will be developed off the coast of Shanghai closeby to the Lingang Special Area of China (Shanghai) Pilot Free Trade Zone, and will comprise two phases.
The first phase will be a 2.3MW demonstration facility that aims to reach operational status in September. Following this, the partners plan to scale capacity to 24MW during the project's second phase.
The second phase will integrate renewable energy, advanced cooling, and cross-border data capabilities, said Su Yang, general manager of HiCloud.
In addition, Su claims that the natural cooling system, from being submerged in sea water, will reduce the refrigeration energy consumption from 40-50 percent of the total power use to under 10 percent, reducing overall energy use by 30-40 percent in comparison to traditional data centers.
The UDC will be made up of groups of modular data units, which will be cooled by seawater and powered by offshore wind energy. Exact details of which offshore wind turbines will power the UDC have not been disclosed.
"This fusion of new-quality computing infrastructure and AI-ready scenarios aligns with our goal to strengthen Lingang's position as a global hub for cross-border data flows, AI computing, and intelligent connectivity," said Chen Jinshan, head of the administrative committee of Lin-gang Special Area of China (Shanghai) Pilot Free Trade Zone.
HiCloud first tested the viability of UDCs in 2021 with a deployment off the coast of Hainan Island in China. It followed this up with its first commercial deployment in 2023. In February 2025, HiCloud added a further data center module to its Hainan UDC cluster, containing 400 high-performance servers.
Several other companies have tested the viability of UDCs. Most notably in 2015, Microsoft launched the world's first UDC off the Pacific coast of the US. It followed this up with another pilot project off the coast of Orkney in the North Sea in 2018. However, last year, DCD confirmed that the project had been abandoned.
At least two start-ups, in the form of Subsea Cloud and NetworkOcean, are also planning UDCs. However, NetworkOcean was hit with permitting issues while trying to initiate testing off the coast of San Francisco in September of last year.
