Historically, undersea fiber-optic cables, which carry over 99% of intercontinental internet traffic, were owned by consortia of telecommunications companies. This model ensured shared access and distributed ownership among often state-backed entities. However, in the last decade, a significant shift has occurred, with US tech giants like Google, Meta, Amazon, and Microsoft becoming dominant players. These "hyperscalers" now own or lease approximately 70% of global undersea bandwidth, moving away from shared consortia to building proprietary cables for their own data traffic.
This shift is driven by the internal data requirements of artificial intelligence, cloud platforms, and content delivery services. For instance, Google already operates a cable connecting South Carolina, Bermuda, and Portugal, and Amazon will solely own a new cable between Ireland and the U.S. Meta is investing significantly, with its Waterworth project being a massive 50,000-kilometer cable circling the globe. The global submarine cable market, projected to reach $32.8 billion by 2026, is seeing immense growth catalyzed by the generative AI boom, with required bandwidth expected to triple between 2022 and 2027.
The increasing private ownership by a few US tech companies, particularly Google with significant stakes in at least 20 cable systems, raises geopolitical and economic concerns. Countries, including the EU, the US, and China, are growing increasingly wary of the implications. This concentration of ownership allows these companies to control capacity, routes, landing points, and terms of access, dictating internet access quality and digital economies in various regions. There are also rising concerns about the potential for governments to leverage this control, as evidenced by a US president potentially pressuring tech giants to block access to their cables.
The instrumentalization of these cables for geopolitical ends is becoming apparent, with Washington pushing "Clean Cable" initiatives to exclude Chinese components and the bifurcation of subsea architecture into politically aligned spheres. The fragility of these critical infrastructures has been highlighted by incidents like the March 2024 severing of four undersea cables in the Red Sea, disrupting 25% of data traffic between Asia, Europe, and the Middle East, and suspected sabotage in the Baltic Sea prompting NATO deployment. This makes subsea cables a strategic national asset, with governments treating their owners similarly to defense contractors.
