South Korean city Ulsan bets $37m on underwater AI data centers

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Ulsan is testing underwater data centers to support growing AI workloads

The project carries a KRW 51.1 billion (about $37 million) budget through 2030

Seawater could provide cooling without conventional mechanical refrigeration systems

South Korean city Ulsan is exploring underwater infrastructure as AI computing continues to strain land availability, power grids, and cooling systems nationwide.

The city is partnering with the Korea Institute of Ocean Science and Technology (KIOST) to design a standardized subsea data center model.

Officials hope the approach can ease some of the site and cooling constraints that conventional data centers increasingly face across the country.

Building a standardized underwater model

The partnership between Ulsan and KIOST runs through 2030, with a combined budget of KRW 51.1 billion (about $37 million) - KRW 40 billion (about $29 million) of which comes directly from the central government, with the remainder covered locally.

“Ulsan plans to complete the standard model by 2030 and begin developing an underwater data-center complex for commercialization from 2031,” the city said.

The goal is a working, carbon-neutral template for underwater computing that other sites could later replicate.

The project will take place in waters roughly 20 meters deep off the Ulsan coastline, where engineers plan to rely on seawater — which averages about 13.3°C annually — as a core part of the cooling strategy.

Researchers intend to combine pressure-resistant vessel design with hybrid cooling systems described as ultra-high-efficiency by project planners.

Server units and power distribution equipment will follow standardized modular designs meant to simplify future scaling.

The team is aiming for an operating efficiency of approximately PUE 1.2 once testing concludes.

SK Telecom joined the partnership in January 2026, taking on responsibility for GPU-based infrastructure and server operations management.

In addition to Ulsan and KIOST, other research organizations, academics and industry professionals are part of the project working behind the scenes.

Their combined role covers everything from vessel engineering to the software layer that will eventually manage AI workloads underwater.

A larger commercial vision

A separate, longer-term concept discussed by the city involves roughly KRW 500 billion (about $360 million) in investment and capacity for up to 100,000 servers.

This larger sum is not tied to the current phase of work and only reflects what a full commercial buildout could eventually cost.

Whether Ulsan reaches that scale will depend entirely on how the initial testing phase performs.

South Korea faces mounting pressure to expand computing capacity as AI workloads multiply across chipmakers, cloud providers, and research institutions nationwide.

Land near major population centers remains scarce and expensive, pushing planners toward unconventional sites away from crowded urban areas.

Ocean water offers a cooling resource that requires none of the mechanical refrigeration conventional facilities depend on heavily.

If the Ulsan demonstration performs as expected, similar underwater sites could eventually spread along other stretches of Korea's coastline.

For now, the ocean floor represents a promising but unproven answer to Korea's expanding AI infrastructure demands.

Via SSC Subsea Cables