South Korea to Build Carbon-Zero Underwater Data Center in Ulsan

The city of Ulsan, South Korea, is developing a carbon-zero underwater data center by 2030 to combat the soaring energy costs and heat generation associated with AI expansion. Backed by 40 billion won ($29 million) in funding from the Ministry of Oceans and Fisheries, the project utilizes deep-sea seawater for natural cooling.

The fiscal pressure on onshore data centers has reached a breaking point. Real estate scarcity and the massive electricity requirements for HVAC systems are compressing margins for operators. By shifting infrastructure to the seabed, Ulsan aims to bypass the costly land acquisition and energy-intensive cooling cycles that currently plague the sector.

Ulsan Secures 51.1 Billion Won for Subsea Infrastructure

Ulsan announced Wednesday it is the final site for the “Carbon-Zero Underwater Data Center Standard Model Development Project.” According to en.sedaily.com, the city has secured 40 billion won in central government funding over the next five years, bringing the total projected investment to 51.1 billion won through 2030. The initiative is a joint effort with the Korea Institute of Ocean Science and Technology (KIOST).

The financial logic rests on the thermal properties of Ulsan’s offshore waters. The region maintains an annual average temperature of 13.3°C, providing a consistent heat sink. According to en.sedaily.com, the project seeks to verify operational performance at a Power Usage Effectiveness (PUE) level of 1.2 at a depth of 20 meters. A PUE of 1.2 would represent a significant efficiency gain over traditional land-based facilities, where cooling often accounts for a massive portion of the total energy spend.

The Technical Blueprint: Modular Pressure Vessels

To prevent catastrophic hardware failure under oceanic pressure, the project combines pressure vessel design with ultra-high-efficiency hybrid cooling technology. Data center architecture and power equipment will be developed in modular, standardized configurations. According to datacenterdynamics.com, this modularity is intended to ensure cost-effectiveness and scalability for future large-scale complexes.

The project’s roadmap is aggressive:

• 2024: Commencement of optimal site analysis and basic design.
• 2025-2030: Installation of performance testing facilities and full-scale demonstration.
• 2031: Launch of construction for a large-scale commercial underwater data center complex.

Reports from November 2024, cited by datacenterdynamics.com, indicate the partners intend to eventually build an underwater complex housing 100,000 servers on the seabed.

Industry Precedents and the “Natick” Shadow

Ulsan is not the first to attempt this, but it is entering a market with a mixed track record. Microsoft’s Project Natick, which deployed a subsea data center off the coast of Scotland in 2018, was shuttered in 2024 according to datacenterdynamics.com. While Natick proved that underwater servers could be more reliable than land-based ones, the commercial scalability remained elusive.

Contrast this with current global movements:

• China: HiCloud operates a commercial underwater facility in Hainan Province, which expanded in 2025 according to datacenterdynamics.com.
• United States: DeepGreen Western Passage announced plans for a tidal-powered data center off the coast of Maine in March.
• San Francisco: NetworkOcean faced permitting hurdles with subsea tests and has pivoted toward floating facilities, per datacenterdynamics.com.

Strategic Partnerships and the AI Capital Ambition

Ulsan has assembled a consortium of 12 industry, academic, and research organizations to mitigate these risks. Signed agreements in January include partnerships with POSCO, GS Engineering & Construction, SK Telecom, the Ulsan National Institute of Science and Technology (UNIST), and KIOST. This public-private-academic alliance is designed to merge ocean science with information and communications technology (ICT).

“Through this joint public-private-academic-research project combining ocean science technology and information and communications technology, we will overcome the limitations of onshore data centers,” an Ulsan city official stated, according to both en.sedaily.com and datacenterdynamics.com. The ultimate goal is to transform Ulsan into a “sustainable AI capital.”

For the B2B sector, this represents a pivot toward “maritime digital territory.” As onshore land prices in tech hubs skyrocket, the seabed becomes the next frontier for Capex allocation.

As the project moves from design to demonstration, the global market will be watching to see if the 1.2 PUE target is sustainable at a commercial scale.