Hello! I'm your financial journalist and economic analyst assistant. Today, we're going to discuss a report from the International Institute for Strategic Studies (IISS) in the UK, which covers a very intriguing topic that is closely related to everyone's online activities, video consumption, and use of AI: the internet beneath our feet is actually undergoing significant changes beneath the sea.
In the past, undersea cables were laid along the same routes as the ships' routes, mainly passing through major ports where there was a lot of maritime traffic, making those areas the hubs for data transmission. But things have changed. For reasons of safety, speed, and the advancement of AI, these "underwater highways" are now being rerouted to avoid congested areas and even extended to remote islands that were previously overlooked.
To help you understand the implications of this new "underwater geography," I'll break down the key points of the report into five sections in plain language.
1. Core Summary: Undersea Cables are Becoming Decentralized and Strategic
The IISS's research identifies three fundamental changes in the layout of undersea cables in the Asia-Pacific region:
- Less reliance on traditional ports: While places like Singapore and Hong Kong remain important, new hubs such as Los Angeles, Chennai in India, and Taiwan in China are emerging.
- Remote islands becoming stars: Once-unnoted islands like Guam, Fiji, and Christmas Island have become key nodes in global data flow due to the installation of undersea cables.
- Tech giants taking the lead: Instead of being built by telecommunications companies (such as AT&T and NTT), these cables are now primarily funded and owned by tech giants like Google and Meta (the parent company of Facebook). Their purpose is not just to provide broadband but to support their AI and cloud services.
In short, undersea cables are no longer just following the routes of ships; they are being guided by the flow of data, the needs of AI, and geopolitical considerations.
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2. Why are they Avoiding the South China Sea?
The report highlights a clear trend: new cables are deliberately avoiding the South China Sea and other traditional strategic chokepoints.
- Reasons for the change: The old routes were the shortest and thus the most cost-effective, but they come with significant risks and longer approval processes due to international legal and sovereignty issues in disputed areas.
- Examples: The planned I-AM and Candle cables are being routed closer to the Philippines' exclusive economic zone to avoid the South China Sea. The already built Bifrost and Echo cables use safer routes, such as the Suez and Banda Straits.
- Impact on users: While you may not notice, these changes could result in slight increases in network latency (in milliseconds), they offer greater network stability and reduce the risk of outages due to geopolitical conflicts.
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3. How Do Remote Islands Become Digital Powerhouses?
These islands, which were previously unimportant, are now becoming vital data hubs:
- Guam: An important U.S. military base, it has become a major undersea cable hub.
- Christmas Island: Only one cable connected it to the internet before, but three new ones are planned for 2028-2029.
- Fiji and French Polynesia: These islands in the South Pacific are being heavily connected to the global network.
- Reasons for their selection: They provide strategic redundancy in case main routes are cut off and offer military and security benefits.
- Impact: This ensures that data can still flow even if major routes are damaged, and they fill gaps in internet connectivity in many remote countries.
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4. Why Are Tech Giants Like Google and Meta Building Their Own Cables?
Tech giants are investing in undersea cables to control their data infrastructure:
- AI data needs: AI training requires massive amounts of data, which traditional broadband services cannot handle quickly or reliably.
- Control over data flow: If cable providers raise prices or cut off services for political reasons, it could disrupt their operations.
- Cloud services: Building their own cables improves the efficiency of data transmission between their data centers.
- Impact on the industry: This has widened the digital divide, as only large companies can afford to build cables, leaving smaller firms dependent on them.
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5. What Does This Mean for China?
The report discusses the implications for China:
- Challenges: China's traditional role as a data hub is being challenged, as new routes are being established outside its coastal areas.
- Opportunities: China can leverage its expertise in undersea cable manufacturing and deployment to participate in the digital connectivity of South Pacific countries, enhancing its influence in the region.
- Security considerations: China must strengthen its monitoring capabilities to protect its cables from attacks and also play a role in shaping international regulations to prevent them from becoming tools in geopolitical conflicts.
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Conclusion and Outlook
Undersea cables are no longer just communication tools; they have become a critical infrastructure in the realm of geopolitics, technological competition, and national security. This shift means that the future of the internet will be shaped by tech giants and geopolitical factors, with a network that connects remote islands with major powers.