Microsoft shut down Project Natick in June 2024, ending a decade-long experiment in underwater data center technology. Phase 2 of the project, conducted from 2018 to 2020 off Scotland’s Orkney Islands, demonstrated a failure rate of just 0.7% for submerged servers compared to 5.9% for land-based equivalents, with a power usage effectiveness of 1.07 using seawater cooling. Despite these positive results, Microsoft is now prioritizing massive land-based AI clusters such as its Fairwater facility in Wisconsin. Chinese operators continue advancing in the space with operational underwater data centers reaching up to 24 megawatts. For investors, capital is flowing toward proven scalable land-based infrastructure in the near term, while ocean-based solutions remain a longer-duration bet.
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