SHANGHAI, June 10 -- While much of the world builds power-hungry data centers that drink rivers dry and strain electricity grids, China has just dropped one into the sea. The country has switched on the world's first commercial underwater data center, a wind-powered, sea-cooled facility submerged off the coast of Shanghai that points to how Beijing intends to win the most physical battle of the artificial-intelligence era: the fight for power and water. The installation, which came online this week in the Lin-gang Special Area, sits about ten metres beneath the surface and houses nearly 2,000 servers, including the kind of GPU clusters that train AI models.

The engineering is the point. Some 95 percent of the facility's electricity comes...