China Holds 80% of Underwater Data Center Patents, Study Finds

Chinese players dominate patents on underwater data centers, Bright reported on 14 November 2026. An underwater data center is a group of servers placed in a sealed, pressure-resistant container on the seabed, which releases its heat into the surrounding seawater. According to Bright, China holds 80% of all patents worldwide for this technology. The figure comes from a study by two Chinese scientists who analysed 168 patents filed between 2006 and 2026.

According to Bright, the study shows a shift. Researchers from the United States, Norway and Canada were initially focused mainly on protecting equipment underwater, while China is increasingly focused on building and maintaining complete data centers. South Korea holds roughly 17% of the patents studied, according to Bright. The remaining patents are spread across the United States and Europe, among others.

Why put servers on the seabed?

The interest is linked to heat, one of the biggest challenges of the growing data center industry. Servers use large amounts of electricity and turn a significant share of it into heat. To prevent overheating, data centers depend on large cooling systems, which according to Bright cost money and also consume electricity themselves. In an underwater data center, special cooling systems transfer the heat to the cold seawater, which may reduce the need for traditional cooling installations.

Bright stresses an important nuance: the servers themselves do not automatically use less electricity. What can fall is the energy needed to cool them.

What is China already doing in practice?

According to Data Center Frontier, which published on the subject on 29 May 2026, China has moved furthest from demonstration to deployment. Multiple sources reported in May 2026 that HiCloud's offshore wind-powered underwater data center off Shanghai, in the Lingang Special Area, had reached full commercial operation, with a stated capacity of 24 megawatts. The project was launched in June 2025, completed in October, tested in February and entered full operation in May 2026.

Reports place the modules roughly 35 meters below the surface, and Chinese media cite a PUE below 1.15. PUE (Power Usage Effectiveness) is the ratio between a data center's total energy use and that of the IT equipment alone; the closer to 1, the less energy goes to cooling and overhead. According to Offshore Wind, cited by Data Center Frontier, the site was developed in phases: first a 2.3-megawatt demonstration facility, then 24 megawatts. The developer claims 22.8% lower electricity use, no water use and more than 90% less land use. These are the developer's claims, not independently verified measurements.

The GPU servers in the modules are reportedly used for annotating big data, for developing Chinese large language models and for coordinating offshore and onshore computing. China Telecom and LinkWise are named as users or participants. Earlier, in 2023, a cluster was launched near Hainan which, according to multiple sources, is modular and can be deployed within 90 days after factory installation and testing.

HiCloud itself was founded in 2020 by Beijing Highlander Digital Technology and relocated to Lingang. According to Lingang's official English-language site, the company raised 50 million yuan in a Series A round in 2025, bringing total financing above 100 million yuan, and holds more than 100 patents covering navigation, ocean observation and underwater data centers.

Why did Microsoft stop Project Natick?

The technology is not new. Microsoft experimented in 2018 with Project Natick, an underwater data center off the coast of Scotland, which ran for about two years according to Bright. According to Microsoft, the failure rate was one-eighth of that at comparable land-based data centers. Even so, the company did not roll the technology out commercially and confirmed in 2024 that the project had ended. Data Center Frontier writes that Natick mainly exposed challenges in maintenance, sealing and integration into mainstream cloud operations.

The US company Panthalassa takes a very different route: according to Data Center Frontier, it announced a $140 million Series B round in May 2026 led by Peter Thiel. It does not want modules on the seabed but self-propelled floating nodes that capture wave energy, run AI inference (running a trained model to produce answers) on board and send data through low-Earth-orbit satellites.

Does 80% of the patents make China the technology leader?

Bright warns that this does not mean China actually owns 80% of the technology for underwater data centers. Patents are bound to a territory, and a large share of them does not automatically give a country worldwide control over a technology. The study does show, however, that China is active in an area that may become more important as demand for data center capacity keeps growing.

Data Center Frontier puts the core question this way: not whether a server can run underwater, because it can, but whether this can scale economically, safely and reliably. It also points to environmental concerns, since heat discharged into sensitive ocean ecosystems calls for credible impact assessments. Whether the Chinese projects will face the same scrutiny as a US project is, according to the site, still unclear.

What does this change for a US business?

For US data center operators and companies that buy computing power, little is likely to change in the short term: the sources read show no commercial offering in the United States or Europe, and the savings figures come from the developers themselves. Cooling is nonetheless a cost line every buyer can put a number on. Ask suppliers about PUE and water use, and follow patents and pilots around underwater systems as a possible cooling route for coastal sites. Anyone who one day wants to use such a technique will have to reckon with patent rights held largely by Chinese parties, even though the territorial limit of patents remains an important caveat.