Chinese underwater data center firm HiCloud has launched a demonstration project connecting servers directly to an offshore wind farm, and announced plans to scale up its subsea deployments to 500MW.

The demonstration site, which previous reports have said will offer 2.3MW of data center space, is located off the coast of Shanghai close to the Lingang Special Area of China (Shanghai) Pilot Free Trade Zone, and was inaugurated at an event on Tuesday.

It has not been disclosed where the wind turbines powering the data center are located.

“This marks a significant milestone for the Lingang Special Area in deeply integrating the digital economy, new energy, and the marine economy,” the company wrote on LinkedIn. “It also represents a major initiative by Shanghai to support national strategies and build a global hub for technological innovation.”

The demonstration project marks the first stage of HiCloud’s plan to build a large-scale underwater data center powered by offshore wind. The event saw a cooperation agreement signed between HiCloud and industrial partners Shenergy Group, Shanghai Telecom, Shanghai INESA, and CCCC Third Harbor Engineering Company, with the companies agreeing to work together on a 500MW underwater data center.

A location for this project, and timescales for construction, were not disclosed.

HiCloud is a division of Highlander, which has previously developed what it describes as the world’s first underwater data center modules off the coast of Hainan Province, China.

The company first experimented with underwater data centers in 2021 with a deployment off the coast of Hainan Island. 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.

Other companies have tried to sink data centers into the ocean, most notably Microsoft, which launched the world's first underwater data center, dubbed Project Natick, off the Pacific coast of the US in 2015. 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 cloud giant had abandoned its undersea endeavors.

At least two start-ups, in the form of Subsea Cloud and NetworkOcean, are also planning underwater data centers.