Some PR consultant spent time earlier this year running what the data center industry calls a community education campaign. The community showed up angry. They wanted to know about water use. They wanted to know about power consumption. They wanted to know why nobody asked them first.
The consultant didn't have great answers for all of it. I surely don't either.
What the industry has are facts, and facts rarely satisfy people who feel like they've been managed. The honest case for data center development is true enough. Computing infrastructure has to go somewhere, and the communities that figure out how to host it well will have advantages the ones that don't will envy in fifteen years. It also sounds exactly like what a consultant would say to a room full of people whose property values are about to be affected by something they didn't vote for.
So the anger made sense. It still does.
What's happened since is that the anger organized. There were eight active moratoriums or bans on data center development in the United States a year ago. There are 78 today. In 2025, opposition killed 48 projects and scuttled $156 billion in planned development. Virginia, the densest data center market in the country, just published a poll showing community support for new facilities dropped from 69 percent in 2023 to 35 percent today. Maine passed a law blocking new data centers that draw more than 20 megawatts until fall 2027. Ohio voters may get a statewide ban on their ballot.
The industry created this problem by treating community concerns as a communications challenge. Tell people the right things, in the right order, with enough economic development projections, and they'll come around. They didn't come around. They organized. That's what happens when you manage people instead of leveling with them.
Here's what nobody is connecting to that fight.
In May 2026, China turned on the world's first commercial underwater data center. It sits 35 meters below the surface off Shanghai's Lingang coast. The HiCloud facility runs 24 megawatts, houses nearly 2,000 servers including GPU clusters, uses passive ocean cooling, and draws its power entirely from offshore wind. Its power usage effectiveness is below 1.15. Google's global average, on land, with hundreds of engineers managing the cooling systems, is around 1.1.
HiCloud eliminates the water consumption problem. It eliminates the land footprint problem. It cuts electricity consumption by more than 22 percent compared to equivalent land-based facilities. Water use. Heat. Land footprint. Visual intrusion. The full complaint list driving those 78 moratoriums is solved by putting the thing underwater.
The United States had this figured out first.
Microsoft's Project Natick launched in 2015. In 2018, the company dropped a sealed module containing 855 servers off the Orkney Islands in Scotland, left it alone for twenty-five months, and pulled it back up. The servers were in better shape than comparable land-based units. Fewer failures. Better performance. The ocean worked.
Microsoft shut the project down in June 2024.
Noelle Walsh, who runs Microsoft's Cloud Operations division, explained why without hedging. Sealed pods can't be upgraded. You lower them into the ocean, lock them tight, and that's the hardware you have until you pull the whole thing back up. The AI buildout has compressed hardware cycles to months, not years. A sealed pod with last year's GPUs sitting on the seabed is capital you can't deploy. Microsoft learned what it needed to learn and walked away.
Fair enough. But here's what that decision left behind.
The only commercially operational subsea data centers in the world belong to China. HiCloud off Shanghai. A second facility, operated by Highlander Digital Technology, off Hainan. Both running now. The United States has zero.
This matters for reasons that go well past economics. Seven undersea cables were cut in the Baltic Sea between November 2024 and January 2025 alone. NATO launched Operation Baltic Sentry in January. The United Kingdom stood up Atlantic Bastion in December to protect North Atlantic subsea infrastructure. Defense analysts have already flagged that China's subsea facilities can be integrated into military surveillance networks to monitor naval movements and gather signals intelligence in ways that have no civilian equivalent and no meaningful outside oversight.
HiCloud is backed by Alibaba and Chinese state entities, located in a special economic zone the Chinese government has developed aggressively since 2019. Whatever China says about its purposes, the United States has essentially no ability to independently verify what those servers are doing or what data passes through them. Your data, or data about you, routed through infrastructure you cannot inspect, in international waters, operated by a government that answers to nobody you elected. That is not a hypothetical. It is the current trajectory.
Now add what happened in March.
Before dawn on March 1, 2026, Iranian Shahed drones struck two AWS data centers in the United Arab Emirates. A third facility in Bahrain was hit the same night. AWS described what followed without softening it. Structural damage. Disrupted power delivery. Fire suppression activities that caused additional water damage. Banking systems went offline. Payment networks failed. Enterprise software across the region went dark.
Iran's state media was explicit about why Bahrain was targeted. The facility had been hit, they said, for "supporting the enemy's military and intelligence activities."
This was the first time in history that a country deliberately targeted commercial data centers in wartime. It will not be the last. By April, Iran had issued explicit threat lists naming Microsoft, Google, Apple, Meta, Oracle, Intel, HP, IBM, Cisco, Dell, Palantir, and Nvidia. An Oracle facility in Dubai was struck April 2nd. Another Amazon facility in Bahrain was hit April 1st.
The assumption that has organized the entire data center industry is now a historical artifact. Commercial infrastructure does not exist in a separate category from military targets.
This is where the land-based opposition and the subsea alternative and the sovereignty question converge into something that actually matters.
The communities blocking data center construction in their backyards are not wrong that these facilities create impacts. They are wrong, or at least incomplete, about what those impacts ultimately represent. A data center isn't a warehouse. It is critical infrastructure that foreign governments have now demonstrated they consider a valid military target. Where it gets built, who owns it, and whose jurisdiction it operates under are not zoning questions anymore. They are national security questions dressed in zoning language because nobody at the planning commission level has the framework to think about them any other way.
Moving data centers underwater solves the community opposition problem in the sense that there is no community underwater to oppose anything. But it does not solve the targeting problem. It changes the threat profile. Land-based facilities can be droned, as Iran proved. Subsea facilities can be sabotaged by autonomous underwater vehicles, technology that Russia and China have both developed and deployed. Severing the power and data cables that connect a sealed pod to the surface is not a complicated operation for a country with submarine capability. The maintenance access problem that ultimately killed Natick is also a defense problem. You cannot get inside a sealed pod once it's underwater.
The states that moved early on infrastructure transitions understood something the ones that hesitated learned slowly. The window for positioning is shorter than it looks. Catching up costs more than getting there first. I covered the EV transition from the automotive press for years and watched that play out in real time. The counties in Virginia now sitting at 35 percent support for new data centers were at 69 percent three years ago. Three years is a long time in a technology buildout cycle. In every other sense it is nothing.
The voters are not wrong to want a voice. They are right that the industry lied to them by omission. About water, about power, about what happens when the tax incentives run out. That anger is earned and it should push the industry toward transparency it has consistently avoided. The problem is that the decision being made at the county commission level isn't just about the local water table. It is about whether the United States maintains sovereign control over the infrastructure layer that the next decade runs on, or whether it cedes that ground, first to other states and then to other countries, while the public conversation stays focused on noise ordinances and truck traffic.
The ocean is still out there. Natick proved the concept works. Someone will build subsea data centers at scale in American waters. The Iran strikes proved that land-based facilities are now wartime targets. The China deployments proved the technology is commercially viable today. The Baltic cable cuts proved that underwater infrastructure is not safe simply because it's underwater.
Every one of those facts was available before June 2026. None of them have made it into the zoning meeting.
