Hyperscalers Are Carving Up The Ocean Floor Into Private Internet Highways

The dominance of US-based hyperscalers like Google, Meta, Microsoft, and Amazon in subsea cables has reshaped the industry and put critical infrastructure at risk, an Australian think tank claims.

Over the past decade, the amount of international subsea capacity used by the four hyperscalers increased from 10 percent to 71 percent, causing the Australian Strategic Policy Institute (ASPI) to conclude that their influence "hasn't yet been fully recognized or seriously considered."

As the primary drivers of the service that cables provide – a commodity that has surged in demand thanks largely to cloud computing services and AI – it's only smart that the hyperscalers would transition from major customers of cable capacity to owners themselves.

According to one tracking website, Google is a part or sole owner of around 33 subsea cables, Meta about 15, Microsoft five, and Amazon four.

It's a shift that sees the players expand control over the entire internet services value chain – from content creation to data storage, processing, and network transport.

Furthermore, their entry to the market has displaced the previously dominant telecom carriers, bringing along significant financial backing against which it is near impossible to compete. There's only a limited supply of both existing subsea cables and resources to build new ones.

This gives the four Big Tech players the ability to shape the capacity within the cables – usually toward high capacity – as well as significant input into where they land.

"Whereas the subcable industry once connected population centers (cities where the interconnection points with terrestrial networks were usually located), hyperscalers are building out routes between datacenters (which are located where there's sufficient space and power for their hyperscale datacenter facilities)," asserted ASPI.

It's not an entirely bad scenario as the new routes "introduce greater resilience" and more standardization, according to the think tank. But the level of control they represent does raise other issues and questions – like those related to data security and the risk of disruptions.

"A compromise of their digital assets or networks – whether through malicious attacks or accidental failures – could lead to widespread disruptions, undermining the resilience of global communications," explained the report authors.

It could also disrupt the concept of an open internet. After all, the hyperscalers have the power to prioritize their own services, thereby limiting consumer choice and competition.

Geopolitical factors further complicate this landscape. Beyond potential sabotage, governments will often fund the cables of other nations as a way to gain influence in the region.

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In 2016, the Solomon Islands government awarded a contract to China's Huawei Marine to build a submarine cable linking the islands to Australia. However, Australia intervened, citing security concerns, and spent A$100 million ($74 million) to build it.

It's not unusual to see the US, Australia, China, or even Japan funding cables in the Pacific – each acting on both allied and individual interests, which are undoubtedly further complicated by the interests of the major hyperscalers.

"It is important to remember that the hyperscalers are not immune to geopolitics," warned ASPI writers.

ASPI suggested the hazards of hyperscale cable dominance could be negated through close government engagement with industry, regulatory adjustments, and strategic oversight that identifies any risk of supply chain dependency or anti-competitive behavior.

More specifically, the Australian government should evaluate the impact of hyperscaler investment on strategic data interests, and align commercial activities with national security priorities.

The conversation echoes concerns from other governments on the power wielded by Big Tech.

"Critical infrastructure has been outsourced to private industries," thundered Danish tech ambassador Anne Marie Engtoft Meldgaard at a conference in Singapore in October last year.

Singaporean minister Teo Chee Hean commented that large tech companies "enjoy a remarkable degree of freedom from regulation and accountability for their activities and the content they carry." ®