Editor’s note: Electronics recycling will be featured in sessions at the 2026 E-scrap Conference in New Orleans October 26-28.
A new class of data center infrastructure is beginning to emerge, one that prioritizes sealed environments, remote operation and proximity to energy generation rather than physical accessibility. While still at an early stage, underwater and other sealed modular data centers could introduce changes that extend well beyond energy efficiency, with implications for IT asset disposition, refurbishment and electronics recycling.
China’s recently commissioned offshore wind-powered underwater data center, located near Shanghai’s Lingang Special Area, offers one of the first commercial-scale examples. The facility reportedly houses about 2,000 servers in sealed subsea modules positioned alongside offshore wind turbines, using surrounding seawater for cooling instead of conventional HVAC systems. Developers claim the design can achieve a Power Usage Effectiveness (PUE) near 1.15, reflecting the growing push to reduce the energy intensity of AI infrastructure.
That push is unlikely to be limited to subsea environments. As AI-driven computing demand accelerates and power constraints intensify in major markets, operators are increasingly exploring a wider range of deployment models tied directly to energy availability. In addition to offshore and underwater concepts, early-stage proposals have included desert-based facilities co-located with solar generation, as well as more experimental concepts such as orbital or space-based data centers designed to take advantage of continuous solar exposure. Many of these ideas remain speculative or in pilot phases, but they point to a broader shift toward placing computers where energy is most abundant rather than where infrastructure has traditionally been easiest to access.
Within that context, underwater data centers can be seen as one of the first commercially viable expressions of a larger trend toward remote, sealed and energy-aligned infrastructure.
While much of the attention has focused on efficiency gains, the project also highlights a less-examined shift: a move toward infrastructure designed to operate for long periods without human intervention. That design philosophy, while beneficial for reliability and energy use, may complicate traditional assumptions about how equipment is serviced, upgraded and ultimately recovered and decommissioned.
For ITAD providers and other stakeholders in IT equipment end-of-life, the core issue is access. Conventional data center decommissioning depends on the ability to physically reach and process equipment at the component or rack level. In a subsea environment, hardware is sealed, submerged and retrieved intermittently, if at all. Decommissioning could shift toward the handling of intact modules rather than individual assets, introducing new logistical requirements that more closely resemble marine operations than traditional facility teardowns.
Such a shift could affect not only how equipment is recovered, but also what condition it is in when it enters downstream markets. Systems designed for multi-year, no-touch operation may experience different wear patterns, potentially improving reliability in some respects while limiting opportunities for repair or incremental upgrades. If operators opt to replace entire modules at once, ITAD providers could see larger, more synchronized volumes of equipment entering the recovery stream, rather than the staggered refresh cycles that currently characterize much of the sector.
These dynamics also raise broader questions about circularity. Underwater data centers are often framed as a sustainability solution because of their energy profile and integration with renewable power. Systems optimized for sealed, maintenance-free operation are not necessarily optimized for disassembly or component reuse. That tension could become more pronounced if future designs favor durability and containment over accessibility.
At the same time, the environmental equation extends beyond operational efficiency. Subsea deployments require pressure-resistant enclosures, specialized cabling and marine installation, all of which carry their own material and emissions footprint. End-of-life retrieval, if required, would likely involve vessel operations and offshore handling, adding further complexity to lifecycle assessments. As a result, the overall sustainability profile may depend as much on recovery practices as on energy performance during use.
Upstream, these conditions may begin to influence how hardware is designed. Equipment intended for underwater or similarly remote environments may need to prioritize corrosion resistance, sealing and long-duration reliability, potentially accelerating a shift toward more modular, self-contained systems. That, in turn, could reshape secondary markets if fewer devices are available for component harvesting and refurbishment.
The supply chain supporting these systems may also evolve in parallel. Companies specializing in advanced enclosures, passive cooling and remote monitoring technologies are likely to play a larger role, alongside marine engineering firms responsible for deployment and retrieval. Whether those systems are ultimately designed with end-of-life recovery in mind remains an open question.
Regulatory frameworks have yet to catch up with these developments. Issues such as environmental oversight, retrieval obligations and long-term liability for submerged or remote infrastructure are still largely undefined, but could become more prominent as deployments expand beyond pilot and early commercial phases.
For now, underwater data centers remain a niche segment, and many uncertainties persist around cost, reliability and long-term maintenance. For ITAD and electronics recycling companies, the importance of this trend lies less in its current scale than in what it signals. As computing infrastructure becomes more modular, remote and increasingly tied to energy availability, the industry may need to adapt to a future where access is limited, recovery is episodic and circularity is shaped as much by design decisions upstream as by processing capabilities downstream.
