Big Tech and the AI ​​investment boom in underwater cables

More than 95% of international data and voice call traffic is transmitted via nearly 1 million miles of underwater communications cables.

These cables carry government communications, financial transactions, email, video calls, and streaming around the world.

The first commercial telecommunications submarine cable was used for telegraphy and was laid across the English Channel between Dover, England, and Calais, France, in 1850.

This technology has since evolved into coaxial cables, which carry telephone conversations, and more recently, fiber optics, which carries data and the Internet as we know it.

“About 10 years ago, we saw the emergence of another large category, such as webscale players. meta, google, AmazonIt’s probably 50% of the market now,” said Paul Gabra, chief commercial officer of Alcatel Submarine Networks.

Alcatel is the world’s largest manufacturer and installer of submarine cables, according to the trade publication Submarine Communications Forum.

Demand for submarine cables is growing as tech giants race to develop compute-intensive artificial intelligence models and connect growing networks of data centers.

Investment in new submarine cable projects is expected to reach around $13 billion between 2025 and 2027, almost double the amount invested between 2022 and 2024, according to communications data provider Telegeography.

“AI is driving the need for subsea infrastructure,” said Alex Aime, vice president of network investments at Meta. “When you think about AI, you often think about data centers, compute, and data. But the reality is, if you don’t have the connectivity to connect those data centers, what you have is a very expensive warehouse.”

In February, the company announced Project Waterworth, the world’s longest undersea cable project, a 50,000-kilometre (31,000-mile) cable linking five continents.

Meta will become the sole owner of Waterworth, which the company says will be a multi-year, multi-billion dollar project.

Amazon also recently announced its first wholly owned undersea cable project called Fastnet.

Amazon says Fastnet will connect the east coast of Maryland to County Cork, Ireland, and has a capacity of more than 320 terabits per second, which is the equivalent of streaming 12.5 million HD movies simultaneously.

“The undersea is really essential to AWS and to connecting internationally across oceans,” Matt Rader, vice president of core networking at Amazon Web Services, told CNBC in an interview about Amazon’s submarine cable investments. “Without the ocean floor, we would have to rely on satellite connectivity, and that would work. But satellites have longer latencies and are more expensive. They also don’t give us enough capacity or throughput that our customers and the Internet as a whole need.”

Google is another major company that has invested in more than 30 undersea cables.

One of the company’s latest projects is Sol, which connects the United States, Bermuda, the Azores and Spain.

Microsoft is also investing in infrastructure.

“We have seen tremendous growth in submarine cables over the past 20 years, and this is driven precisely by the voracious demand for data,” says Matthew Mooney, director of global affairs at cybersecurity firm Recorded Future.

Disruptions due to damaged cables can be very severe, especially in areas with little internet connectivity.

“Cutting the cables could cut off access to the internet in multiple countries, including financial transactions, banking, e-commerce, and basic communications,” said Erin Murphy, a senior fellow at the Center for Strategic and International Studies, a nonprofit national security research institute.

That’s exactly what happened in Tonga, an island nation east of Australia.

In 2022, debris from an undersea volcanic eruption severed the island’s only undersea communications cable, cutting it off from the rest of the world.

In September, an undersea cable was severed in the Red Sea, disrupting Microsoft’s Azure cloud service. Although the company was able to reroute traffic, users in Asia and the Middle East still faced increased latency and poor performance.

Experts say most damage to undersea cables is accidental, usually caused by fishing activities or ships accidentally dropping their anchors on the cables. However, these cables have recently been suspected of being targeted for sabotage.

“When you have so many vessels on the high seas that are frequented by so many commercial and fishing vessels, the potential for an accident is pretty high,” Murphy said. “But if you’re a hostile actor, you know that too. So if you’re sending out a so-called Russian ghost fleet, or if you have a Chinese fishing boat and the cable accidentally gets cut, you can just say, ‘Oh, that was an accident.’ But that could be intentional. Therefore, it can be very difficult to tell whether a damaging act is actually intentional or accidental. ”

Mooney and Recorded Future are tracking some of these suspected sabotage incidents.

“I would say we are seeing a significant increase in what would be considered intentional harm,” Mooney said. “In 2024 and 2025, we saw a notable increase in incidents occurring around the Baltic Sea and Taiwan. Therefore, it is difficult to determine with 100% validity that these incidents were intentional. However, the fact pattern that emerges from these incidents gives us reason to suspect that they may all be considered coincidental.”

Mooney said the increase in sabotage allegations corresponds with rising tensions between Russia and Ukraine, China and Taiwan.

Despite the lack of concrete evidence of submarine cable sabotage, governments are taking the threat seriously.

NATO launched Baltic Sentry in January after several cable cutting incidents occurred in the Baltic Sea. The operation includes the deployment of drones, aircraft, and underwater and surface vessels to protect the region’s undersea infrastructure.

“As a result, I don’t think the Baltic Sea has seen any instances of cable cuts since late January 2025,” Mooney said.

In the United States, the Federal Communications Commission, which is responsible for licensing those wishing to install or operate undersea cables connecting the United States, has introduced strict rules for foreign companies building this infrastructure, citing security concerns.

FCC Chairman Brendan Carr told CNBC: “One of the areas we’ve been particularly focused on is the threat posed not only by Russia but also by the Chinese Communist Party.” “That’s why we are now taking steps to make it difficult or effectively prohibit direct undersea cable connections from the United States to foreign adversaries.”

Carr said the FCC has taken steps to ensure the hardware itself has not been compromised and will not allow Huawei, ZTE and other questionable “spy equipment” to be used on undersea cables.

In July, three House Republicans announced that Meta, Amazon, Google, microsoft Companies were asked whether they used Chinese-affiliated cable maintenance providers.

In response to CNBC’s questions about the letter, Meta’s Aime said, “We do not collaborate with Chinese cable system providers on the systems we have announced and are in full compliance with U.S. policy regulations regarding ecosystem and supply chain partners.”

Amazon also told CNBC that it does not work with Chinese companies.

Microsoft and Google did not respond to CNBC’s requests for comment on the letter.

To understand how submarine cables work, CNBC visited Alcatel Submarine Network’s submarine cable manufacturing facilities in Calais, France, and Greenwich, England. We also spoke to government officials and tech giants to find out why undersea cables are critical to keeping us connected and what can be done to protect this critical infrastructure.

Watch the video to get the full story.