Over 95% of international data and voice call traffic travels through nearly a million miles of underwater communication cables.
These cables carry government communications, financial transactions, email, video calls and streaming around the world.
The first commercial telecommunication subsea cable was used for telegraphs and was laid across the English Channel between Dover, England and Calais, France in 1850.
The technology then evolved to coaxial cables that carried telephone conversations, and most recently, fiber optics that ferry data and the internet as we know it.
“About ten years ago, we saw the advent of another big category, which is the webscale players and the likes of Meta, Google, Amazon, etc., who represent now probably 50% of the overall market,” said Paul Gabla, chief sales officer at Alcatel Submarine Networks.
Alcatel is the world’s largest subsea cable manufacturer and installer, according to industry trade magazine Submarine Telecoms Forum.
Demand for subsea cables is increasing as tech giants race to develop computation-intensive artificial intelligence models and connect their growing networks of data centers.
Investment into new subsea cable projects is expected to reach around $13 billion between 2025-2027, almost twice the amount that was invested between 2022 and 2024, according to telecommunications data provider firm TeleGeography.
A map of the world’s undersea communication cables.
CNBC | Jason Reginato
Big Tech, big cables
“AI is increasing the need that we have for subsea infrastructure,” said Alex Aime, vice president of network investments at Meta. “Oftentimes when people think about AI, they think about data centers, they think about compute, they think about data. But the reality is, without the connectivity that connects those data centers, what you have are really expensive warehouses.”
In February, the company announced Project Waterworth, a 50,000km (31,000-mile) cable that will connect five continents, making it the world’s longest subsea cable project.
Meta will be 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 subsea cable project called Fastnet.
Fastnet will connect Maryland’s eastern shore to County Cork, Ireland, and capacity will exceed 320 terabits per second, which is equivalent to streaming 12.5 million HD movies simultaneously, according to Amazon.
“Subsea is really essential for AWS and for any connectivity internationally across oceans,” Matt Rehder, Amazon Web Services vice president of core networking, told CNBC in an interview about Amazon’s subsea cable investments. “Without subsea you’d have to rely on satellite connectivity, which can work. But satellite has higher latency, higher costs, and you just can’t get enough capacity or throughput to what our customers and the internet in general needs.”
A ship belonging to Alcatel Submarine Networks deploys a plow to install subsea telecommunications cables.
Alcatel Submarine Networks
Google is another large player, having invested in over 30 subsea cables.
One of the company’s latest projects is Sol, which will connect the U.S., Bermuda, the Azores and Spain.
Microsoft has also invested in the infrastructure.
“You’ve seen this huge growth in submarine cables over the past 20 years. And this is driven by just a voracious demand for data,” says Matthew Mooney, director of global issues at cybersecurity firm Recorded Future.
Cut cables
Disruptions due to cable damage can be quite significant, particularly in areas served by few internet connections.
“If you cut a cable, you can cut off multiple countries from internet access, and that includes 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 organization.
That very thing happened to Tonga, an island nation east of Australia.
In 2022, debris from an underwater volcanic eruption severed the island’s only subsea communication cable, cutting the island off from the rest of the world.
In September, cuts to subsea cables in the Red Sea caused disruptions to Microsoft’s Azure cloud service. The company was able to re-route traffic, but users in Asia and the Middle East still faced increased latency problems and degraded performance.
Experts have said that the majority of subsea cable damage is accidental, usually due to fishing activity or a ship accidentally dropping its anchor on a cable. But lately, these cables are becoming the suspected targets of sabotage.
A subsea cable being manufactured at Alcatel Submarine Networks factory in Calais, France.
CNBC
“When you have so many vessels in international waters that are highly trafficked by lots of commercial vessels or fishing vessels, the likelihood of accidents is fairly high,” Murphy said. “But if you’re a hostile actor, you know that as well. So if you’re sending out the so-called Russian ghost fleet, or if you have a Chinese fishing vessel and a cable is accidentally cut, you could just say, ‘Oh, well, it was an accident.’ But it could be intentional. So it’s really hard to discern sometimes when an act of damage is actually intentional or accidental.”
Mooney and Recorded Future have been tracking some of these cases of suspected sabotage.
“I would say that we have seen a significant uptick in what we would consider intentional damages,” Mooney said. “In 2024 and 2025, [we] saw a notable increase in incidents that occurred in the Baltic Sea and around Taiwan. And so it is difficult to be able to determine with 100% validity that these are intentional. However, the fact patterns that emerge from these events does give you cause to be suspicious that they could all be considered accidental.”
Mooney said the increase in suspected sabotage has corresponded to increased tensions between Russia and Ukraine and China and Taiwan.
Despite there being a lack of concrete evidence of subsea cable sabotage, governments are taking the threat seriously.
In January, NATO launched the “Baltic Sentry” following several incidents of cable cuts in the Baltic Sea. The operation involves deploying drones, aircraft and subsea and surface vessels to safeguard the subsea infrastructure in the region.
“As a result, I don’t believe we’ve seen any instances of cable severing since late January 2025, in the Baltic Sea,” Mooney said.
A picture taken on February 4, 2025 shows a Helicopter 15 (HKP15) (L) on the flight deck of patrol ship HMS Carlskrona (P04) on open water near Karlskrona, Sweden, as part of the NATO Baltic Sea patrol mission, the Baltic Sentry, aimed to secure critical underwater infrastructure. The patrol ship HMS Carlskrona (P04) set off from the naval port in Karlskrona on February 4, 2025 to become part of NATO’s Baltic Sentry operation as one of several Swedish ships that are part of Standing NATO Maritime Group One (SNMG1). This is the first time the ship has hoisted the NATO flag on board. The purpose of NATO’s Baltic Sentry operation is to demonstrate presence and secure critical underwater infrastructure. (Photo by Johan NILSSON / TT NEWS AGENCY / AFP) / Sweden OUT (Photo by JOHAN NILSSON/TT NEWS AGENCY/AFP via Getty Images)
Johan Nilsson | Afp | Getty Images
U.S.-China tension
In the United States, the Federal Communications Commission, which is responsible for granting licenses to anyone wishing to install or operate subsea cables connecting to the U.S., has introduced tighter rules on foreign firms building this infrastructure, citing security concerns.
“One area we’ve been particularly focused on are threats that come from the Chinese Communist Party as well as from Russia,” FCC Chair Brendan Carr told CNBC. “So we’re taking actions right now to make it difficult or effectively prohibiting the ability to connect undersea cables directly from the U.S. to a foreign adversary nation.”
Carr said the FCC is also taking steps to make sure the hardware itself isn’t compromised, not allowing Huawei, ZTE or other questionable “spy gear” to be used in undersea cables.
In July, three House Republicans sent a letter to the CEOs of Meta, Amazon, Google and Microsoft asking if the companies have used PRC-affiliated cable maintenance providers.
In response to CNBC’s question about the letter, Meta’s Aime said, “We do not work with any Chinese providers of cable systems on systems that we’ve announced, and we are in full compliance with U.S. policy regulations around partners in the ecosystem and the supply chain.”
Amazon also told CNBC it does not work with Chinese companies.
Microsoft and Google did not return CNBC’s request for comment on the letter.
To understand how subsea cables work, CNBC visited Alcatel Submarine Networks subsea cable manufacturing facilities in Calais, France and Greenwich, England. We also spoke to government officials and tech giants to find out why subsea cables are crucial to keeping us connected and what we can do to protect this critical infrastructure.
Jensen Huang, co-founder and chief executive officer of Nvidia Corp., left, and Masayoshi Son, chairman and chief executive officer of SoftBank Group Corp., during a fireside chat at the Nvidia AI Summit Japan in Tokyo, Japan, on Wednesday, Nov. 13, 2024.
Akio Kon | Bloomberg | Getty Images
SoftBank is selling its entire stake in Nvidia — but not for the reasons you might think.
In its earnings statement released Tuesday, the Japanese group said that it had sold 32.1 million Nvidia shares in October for $5.83 billion.
At first blush, this could be read as a sign that Nvidia’s high valuations are causing SoftBank some unease. And if SoftBank — which infamously pumped $18.5 billion into WeWork only to value it at $2.9 billion eventually — is tamping down on its usual optimism regarding its investments, then retail traders should probably pay attention.
Adding to such worries are comments by Michael Burry — who bet against subprime mortgages before they caused a whole financial crisis in 2008 — on major artificial intelligence companies.
Burry wrote Monday in a post on X that those firms are “understating depreciation” of AI chips, which “artificially boosts earnings — one of the more common frauds of the modern era.” CNBC could not independently confirm that companies were practicing this.
This doesn’t seem to be SoftBank’s concern, however. A person familiar with the group’s sale told CNBC that it had nothing to do with AI valuations. On the contrary, cash from offloading Nvidia chips will be redirected to SoftBank’s $22.5 billion investment in OpenAI, the person said.
Burry said in his post that he will reveal “more details” on Nov. 25, and exhorted readers to “stay tuned.” That might not be enough enticement for SoftBank CEO Masayoshi Son.
— CNBC’s Yun Li, April Roach and Dylan Butts contributed to this report.
Gan Kim Yong, Singapore’s deputy prime minister, during a panel session, at the World Economic Forum (WEF) in Davos, Switzerland, on Tuesday, Jan. 21, 2025.
Stefan Wermuth | Bloomberg | Getty Images
Despite rising trade tensions, Singapore still wants to push ahead with a “multilateral, rules-based trading system,” and sees further cooperation between ASEAN and the European Union.
This was according to Deputy Prime Minister Gan Kim Yong, who spoke at the Singapore Fintech Festival on Wednesday.
Gan, who is also Singapore’s minister for trade and industry, said in a fireside chat with DBS CEO Tan Su Shan that “if we are able to bring both EU and ASEAN together to discuss a digital economic agreement between EU and ASEAN, I think there will be a major breakthrough.”
He also added, “EU will not be part of ASEAN. ASEAN will not be part of EU, but it doesn’t stop [the] EU and ASEAN [to] come together to discuss areas that we can work together.”
Gan did say however, that this will take time, and the two sides will first discuss a digital economic collaboration, “how we can set out basic rules, and then consider next steps.”
Southeast Asia’s digital economy stands at over $300 billion in 2025 in gross merchandise value, according to the 2025 Google e-Conomy SEA report.
He said he hoped that ASEAN will have a digital economy agreement with the EU, as well as for the Southeast Asian bloc to work with the Gulf Cooperation Council and the CPTPP to find ways to facilitate trade investment.
The CPTPP refers to the 11-member Comprehensive and Progressive Agreement for Trans-Pacific Partnership that was formed after U.S. President Donald Trump pulled out of the Trans-Pacific Partnership in his first term.
“So I think there are a lot of opportunities still, despite the headwinds and the uncertainties we are seeing.”
Separately, Gan also said that Singapore would like to work with partners to think about how the World Trade Organisation can be transformed.
“WTO is still [an] important foundation for this rules-based trading system,” he said.
“We will need to transform because the current design architecture of WTO may no longer be workable, and it’s important for us to come together to discuss what is the way forward, what are the areas that require transformation,” Gan added.
Foxconn Chairman Young Liu delivers a speech during the Hon Hai Tech Day in Taipei on Oct. 18, 2023.
I-hwa Cheng | AFP | Getty Images
Foxconn, the world’s largest contract electronics maker, said Wednesday that its third-quarter profit jumped 17% from a year earlier, driven by growth in its artificial intelligence server business.
Here’s how Foxconn did in the September quarter compared with LSEG SmartEstimates, which are weighted toward forecasts from analysts who are more consistently accurate:
Revenue: $2.06 trillion New Taiwan dollars ($66.29 billion) vs. NT$2.06 trillion expected
Net profit: NT$57.67 billion vs. NT$50.41 billion
Foxconn, formally known as Hon Hai Precision Industry, is best known as the world’s largest manufacturer of Apple‘s iPhones, but has been shifting into other business avenues, including AI. The firm manufactures server racks designed for AI workloads and has become a key partner to American AI chip darling Nvidia.
The company said it expects operations in the second half of the year — the traditional peak season — to maintain continuous quarterly growth, citing stronger AI server shipments and rising demand for information and communications technology products.
However, Foxconn cautioned that global political and economic uncertainty, along with exchange rate fluctuations, will require continued close monitoring.
Foxconn reported that its ‘Cloud and Networking’ segment saw strong year-on-year growth, supported by demand for AI server racks.
Foxconn’s server manufacturing business is currently in a strong growth phase, underpinned by robust demand, Ivan Lam, a senior analyst at Counterpoint Research, told CNBC.
The company is leveraging its dominance in contract manufacturing to secure both current and future orders, Lam said, describing it as a clear case of “follow the cash” strategy that involves sacrificing some consumer electronics orders.
He added that Foxconn’s pivot toward high-growth server manufacturing “is clearly paying off,” even as it trades parts of its consumer electronics footprint for longer-term momentum.
While component price volatility, currency swings, and logistics challenges can pressure margins, Lam said he expects Foxconn’s fourth-quarter results to “remain favorable.”
The electronics contract manufacturer also said it is partnering with Nvidia, Stellantis and Uber to build so-called “Level 4” autonomous vehicles, which doesn’t require a safety driver to be present.
Recently, Foxconn signed a memorandum of understanding with Mitsubishi Electric on Nov. 6 to jointly supply energy-efficient AI data center solutions globally. Besides AI data centers, Foxconn and Mitsubishi Electric plan to explore additional new business models and solutions using their combined technological and knowledge capabilities.
