The artificial intelligence-powered economy has a massive vulnerability: the ocean.
The digital world is connected by subsea cables, a roughly 750,000-mile network that could circle the globe 30 times. Laid as deep as five miles below the surface, these cords make daily life—and the global marketplace—possible. While 80 percent of international trade by volume is transported on the sea’s surface, 95 percent of international data flows under it, including instant messages, an estimated $10 trillion in daily financial transactions, and countries’ national-security secrets. Meanwhile, power generated offshore, a growing share of global energy, is often transported via subsea cables.
These two elements—data and power—are the foundations of the AI economy. But the subsea cables through which they flow face escalating dangers, and multiple incidents in the past few months have highlighted those risks.
In November, a Chinese vessel reportedly dragged its anchor along the Baltic seabed for more than 100 miles, severing data cables between Sweden and Lithuania as well as between Finland and Germany. NATO ships had to intervene. A month later, a Russian oil tanker believed to be part of Moscow’s “ghost fleet” cut a cable carrying power between Finland and Estonia, only to be seized by Finnish authorities.
The German foreign minister called these incidents a “wake-up call” for Europe. NATO has since established a new mission in the Baltic to protect undersea infrastructure. But the challenge is global and persistent—in a sign of the heightened tempo of such incidents, another undersea cable—located to the north of Taiwan, which is connected to the outside digital world through just 15 cables—was damaged in early January, potentially by a Chinese ship. Shortly after, two cables to the Taiwan-governed Matsu Islands disconnected due to what Taiwan’s Digital Affairs Ministry called “natural deterioration,” though backup microwave communications were activated to keep the islands’ 14,000 residents online.
In some cases, disruptions are accidental. Backup systems can often limit the negative effects, as they did during the most recent Matsu incident. However, whatever their causes, the consequences of the approximately 150 cable-breaking incidents a year can often be severe, and include internet shutdowns, espionage, and costly repairs and delays.
In one dire incident in 2008, the severing of two Mediterranean cables shut down internet access in 14 countries, including 100 percent of connections in the Maldives, and 82 percent in India. What makes today’s risks even more vexing than they were then are questions of scale and significance. One-off cable cuts are relatively straightforward to fix. But if cables are damaged at particularly sensitive times or places, or on a wider geographic scale, then that task is much more challenging.
Meanwhile, subsea cables are growing even more necessary to daily life as artificial intelligence increases demands for global data transmission, including through overseas data centers connected to the global cable networks.
Hundreds of billions of dollars are being invested in AI infrastructure every year. But that infrastructure is often connected through one of the thinnest, and potentially most vulnerable, physical networks on the planet.
The individual fiber optic strands that, combined, make up the subsea cables through which world’s information flows are often barely thicker than a human hair. And that delicate infrastructure predates the digital age. The first undersea cables made trans-Atlantic telegraph communication possible in the 1850s, and through the technological revolutions since, they’ve connected telephones, modern telecommunications devices, and now the global AI infrastructure.
In recent decades, three main players, analogous to national champions, have dominated the global subsea cable market: SubCom in the United States, NEC Corporation in Japan, and Alcatel Submarine Networks in France. As of 2021, these three companies held a 87 percent global market share.
However, in recent years, China has disrupted the subsea cable ecosystem. Huawei Marine Networks was founded in 2008, and it soon became the fastest-growing subsea cable provider and the fourth-largest in the industry. From 2018 to 2022, HMN Tech, as it was renamed in the intervening years, supplied 18 percent of new cables based on total length. The company’s success followed the playbook of many Chinese technology champions, with subsidies from the Chinese government allowing it to submit lower bids on projects than free-market competitors.
The latest, and perhaps most consequential, market shift in the industry is happening now: the proliferation of artificial intelligence. As data has become the foundation for both the digital economy and the emerging AI industry over the past decade, hyperscalers—or large computing and cloud services providers such as Google, Meta, Microsoft, and Amazon—have become major players in the subsea cable market. Most cables are now built by consortiums of hyperscaler and telecommunication companies. As technology companies build up their cloud and AI capabilities and construct more data centers globally, they also invest in more subsea cables. Today, Google is a part or sole owner of roughly 33 cables.
Even in a stable international environment, it would be impossible to separate subsea cables from geopolitics. There are always risks of sabotage or espionage and the need to adapt to national and international standards-setting. Every international cable project needs government approvals along its routes.
But in a more competitive—even combative—period in global affairs, the subsea cable market has become a more contested arena.
In 2023, FP columnist Elizabeth Braw argued that we are “entering the era of the undersea Iron Curtain.” The public debut of ChatGPT in late 2022 and the proliferation of AI-enabled tools since have brought this 20th-century division into a new period in the history of technology. Because of the rise of AI, these cables are more important than they were even two years ago.
The contest over subsea cables entails old tools of statecraft, such as deterrence and incentives, deployed in new domains. And in recent years, that contest has played out in every major geopolitical theater, affecting global consumers and many of the world’s leading companies.
In Europe, a Chinese-flagged ship is suspected of having damaged a Baltic subsea cable in October 2023, a year before the Baltic Sea sabotage that triggered a NATO response a few weeks ago. In another incident earlier in 2023, another Chinese-flagged vessel reportedly damaged the cables connecting Taiwan with its aforementioned outlying Matsu Islands, leaving them without internet for weeks.
And the warning signs flashed even brighter in 2024. Early last year in the Middle East, three cables in the Red Sea—where 90 percent of Europe-Asia communication flows—were damaged when the anchor of a commercial ship sunk by Houthi missiles dragged along the ocean floor. And U.S. officials told CNN last fall that Russia is developing a deep sea-focused military unit, a capability that could give Moscow new tools for aggression and gray-zone operations and attacks that fall short of war.
The United States’ concern about subsea cables is growing and bipartisan. In 2019, worried about China’s civil-military fusion, espionage, and cyberthreats, the first Trump administration sanctioned Chinese telecommunications giant Huawei. The Trump era’s State Department’s multilateral Clean Network initiative included a “Clean Cable” pillar “to ensure undersea cables connecting [the U.S.] to the global internet are not subverted for intelligence gathering by the [People’s Republic of China] at hyper scale.”
In 2024, under the Biden administration, the State Department built on those initiatives released the “New York Joint Statement on the Security and Resilience of Undersea Cables,” a set of principles endorsed by 30 countries at the United Nations General Assembly. The United States is also a member of the Quad Partnership for Cable Connectivity and Resilience, announced in 2023.
As world powers vie for regional influence and partnerships, subsea cable infrastructure contracts have become commercial contests for spheres of geopolitical influence. In 2021, HMN Tech was pushed out of a project linking three Pacific islands, including the Federated States of Micronesia, which has a defense agreement with the United States. The project was scrapped and later replaced by the East Micronesia Cable project, jointly funded by the United States, Australia, and Japan.
Meanwhile, Vietnam—which has five aging subsea cables—is upgrading its infrastructure, creating a new opening for international ties. U.S. officials and telecommunications companies have held multiple meetings with Vietnamese officials to dissuade them from using geopolitically problematic companies, with officials reportedly pointing out that the choice of infrastructure providers could make Vietnam more or less attractive for international investment.
For many countries, physical connections to Chinese cables are viewed as vulnerabilities. The United States government in 2020 set up Team Telecom, an interagency group tasked with safeguarding United States telecommunications infrastructure and preventing direct cable connections between the U.S. and mainland China or Hong Kong. Team Telecom recommended that the Federal Communications Commission block the Hong Kong segment of four planned subsea cable routes. The project owners of these cables, both hyperscalers, switched their termination points to the Philippines and Taiwan, rather than Hong Kong, at an estimated cost of tens of millions of dollars.
The contest over subsea cables isn’t just playing out in foreign ministries—it’s also altering how companies are governed and how the world is wired. Due in part to U.S. pressure, Huawei divested from Huawei Marine Networks in 2020, when the company rebranded to HMN Tech.
More significantly than a change in name or structure, other companies have been squeezed out of projects since then. The SeaMeWe-6 cable, now under construction, will connect more than a dozen countries across Southeast Asia, the Middle East, and Western Europe. HMN Tech was poised to win the contract in 2020 with a bid that was approximately one-third lower than competitors’, but the United States offered five foreign telecom companies training grants worth a total of $3.8 million if they selected SubCom instead, while warning consortium members of potential sanctions against HMN Tech. SubCom ultimately won the SeaMeWe-6 contract, and Chinese companies left the consortium, to be replaced by enterprises from Malaysia and Indonesia.
The results of such commercial and diplomatic maneuvering are clear: Chinese companies are losing ground in international markets. There are now only three new cables with connections in Hong Kong scheduled for 2025, and none after. For comparison, Singapore, historically a smaller market competitor than Hong Kong, has 26 subsea cables landing at three landing sites, with plans to double the number of sites by 2033. Under the sea as well as over it, the world is becoming more divided.
The geography of subsea connections mirrors geopolitical divides. Rather than transiting the contested South China Sea, for example, Western consortiums now often pursue less direct avenues, such as through the Java Sea. They cover a greater distance at greater cost, but with less geopolitical risk. Guam, Japan, the Philippines, and Singapore may stand to benefit from new routes, especially as they become greater data center hubs. Meanwhile, China has increased its push for new subsea cable projects to the global south and parts of the world that are tied to its Digital Silk Road initiative, where Western interests hold less sway.
A world divided into blocs by digital infrastructure may be more resilient, but security doesn’t come without trade-offs. At $40,000 to $60,000 per kilometer, cables are expensive to lay, and once they’re set and connected to facilities like data centers, they cannot be easily ripped out and replaced. Delayed, canceled, or rerouted subsea cables add uncertainty, complicating market dynamics. Longer cables laid over less efficient routes also mean more latency, as data must travel greater distances.
And while casual internet users may not recognize slower speeds, quick data transfer time is critical across many industries—even milliseconds matter when it comes to executing financial transactions, let alone in military applications.
In the competition over subsea cables, countries can work to increase the security of their infrastructure, but it’s not clear what victory looks like. When it comes to AI, the United States has aimed to keep and develop what former National Security Advisor Jake Sullivan described as “as large a lead as possible,” especially in advanced logic and memory chips, with chip export controls and other measures in place to impede competitors’ progress.
But despite the differences in products made by each enterprise, Chinese companies and the Chinese government have largely achieved self-reliance in subsea cables, with capabilities comparable to Western alternatives. That means that export controls alone can’t ensure Western advantage.
While Beijing’s access to international markets has been curtailed, China possesses the technology and capabilities across the stack to manufacture all components of subsea cables at home. China also has a history of pouring heavy subsidies into the cable industry, a trend that carries across other industries from solar power to electric vehicles, and that gives it asymmetric advantages that distort markets. As a result, despite pressure, HMN Tech remains competitive, can offer lower prices, and is planning to build its own $500 million Europe-Middle East-Asia cable, a rival to the SeaMeWe-6 cable.
China also has a strong foothold in cable maintenance and repair, which are critical and complex components of the infrastructure’s life cycle. The cable maintenance industry divides the ocean into zones, with certain repair ships designated to cover each. As a result, U.S.-owned cables may rely on Chinese repair ships in certain places, which could make them vulnerable to spyware, whatever their ownership.
In one concerning incident, a Chinese repair company that worked on cables owned by U.S. hyperscalers appeared to hide its vessels’ locations near Taiwan and Indonesia, according to shipping data reviewed by the Wall Street Journal. This unusual and unexplained behavior raised alarm about what the vessel was doing and where it was doing it. And repairs are even more complicated and costly in conflict zones, such as during the clashes in the Red Sea last year.
Even in the absence of conflict, competing claims to vital sea lanes can distort the subsea cable market. While the United States has exerted pressure to push Chinese companies out of certain projects, China has gone further, delaying or blocking permits for cables with U.S. involvement, including in the South China Sea.
The rising risks to subsea cable networks are connected to crises above the surface. The Iranian-backed Houthi attacks on international shipping have damaged undersea cables in the Red Sea. Taiwan’s subsea connections are potential targets in coercion campaigns against the island. And even if Western Europe isn’t yet directly engaged in a military conflict with Moscow, its infrastructure is under threat by an expansionist Russia—and NATO is responding to that very real threat.
Rather than wait for something to happen, there are proactive strategies to protect subsea cables and deter bad actors. Enhanced coordination in monitoring and management of the seas can help. Such measures may include increased patrols as well as potentially boarding and inspecting suspicious vessels, particularly in shallow areas with significant concentrations of cables. This approach could deter attacks and improve attribution when they do occur. Meanwhile, AI itself may solve some of subsea cables’ greatest vulnerabilities. The Wall Street Journal reports that AI-enabled underwater systems such as drones are already being used to identify and combat threats, even at the bottom of the ocean.
Where such forward defenses don’t succeed and cable repairs need to be made, especially in contested waters, partners can protect repair ships in the short term and prevent and eliminate threats as they arise. Increased redundancy in sensitive areas, combined with more ex-China repair capacity, including expanding their fleets of cable-laying ships, could decrease downtimes and build on Washington’s Cable Security Program, which authorized and subsidized U.S. repair ships.
Meanwhile, streamlined permitting processes could speed up repairs and build-outs, which once took under 12 months, but can now last for more than three years because of a complex regulatory environment that requires engagement with multiple levels of government, often with uncertain and competing priorities.
An improved regulatory environment can also speed up innovation, which may help build more resilient, diversified cable networks. In the next few years, alternatives to subsea cables—such as satellites and other space-based systems such as satellites in low-earth orbit—have shown promise, though they currently have less capacity than subsea cable networks and are still vulnerable to natural and humanmade disasters. Still, such options, bolstered by a growing private-sector space industry, may provide new data transmission options and backups in certain sectors.
Indeed, a NATO-funded project launched in July 2024 aims to reroute more internet traffic to space, in case of infrastructure disruptions on Earth. And when the two subsea cables connecting Taiwan with the Matsu Islands were disconnected in January, the backup microwave systems were activated almost instantly. Still, such measures currently provide only limited bandwidth. That may suffice for a country’s sparsely populated outlying islands, but it would likely fall short in urban areas or when it comes to high-volume, low-latency data centers.
There is no comprehensive backup for the world’s subsea cable networks. But the seabed, like the surface, is not as peaceful as it once was. A lesson of the 2020s so far has been that when deterrence—whether by denial, punishment, or entanglement—fails in one domain, it can soon collapse elsewhere. That’s also true beneath the waves.
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