America's only underwater internet cable maker faces surging demand

Underwater cables carry nearly all global internet traffic

According to Business Insider, 99% of international internet traffic travels through underwater cables, which span thousands of miles across the ocean floor. These cables form the invisible backbone of global connectivity, enabling everything from cloud computing to real-time financial transactions.

Cloud computing and AI drive record demand

Business Insider reports that demand for underwater internet cables has reached unprecedented levels, driven by the rapid expansion of cloud computing and artificial intelligence. These technologies require massive data transfers across continents, increasing the need for high-capacity, low-latency cables. The surge in demand has put pressure on the limited number of companies capable of manufacturing and deploying these cables.

US relies on a single company for critical infrastructure

The US is home to only one company that can both produce and lay underwater internet cables, according to Business Insider. This company operates a factory that has been in use for 73 years, reflecting the specialized expertise and infrastructure required in this industry. The process involves not only manufacturing the cables but also deploying them using multimillion-dollar ships designed for this purpose.

The concentration of this capability in a single company highlights the high barriers to entry in the underwater cable industry. Manufacturing these cables requires advanced materials science, precision engineering, and compliance with international standards, while deployment demands specialized vessels and skilled crews.

Why underwater cables remain irreplaceable

Despite advancements in satellite and wireless technology, underwater cables remain the primary method for transmitting data across oceans. According to Business Insider, these cables are preferred for their reliability, capacity, and lower latency compared to alternatives. While satellites and wireless networks play important roles in global connectivity, they cannot match the bandwidth and consistency of underwater cables for large-scale data transmission.

What this means

Lazyfounder analysis — our interpretation, not reported fact.

For founders and operators, this story underscores the often-overlooked physical infrastructure that powers the digital economy. While cloud computing and AI dominate conversations about scalability and innovation, the backbone of these technologies—underwater cables—remains a bottleneck with high barriers to entry. The fact that only one US company can both manufacture and deploy these cables highlights a critical dependency. If demand continues to outpace supply, latency, cost, or capacity constraints could become pressing issues for startups reliant on global data flows.

This also signals opportunities for innovation in alternative data transmission methods, such as satellite networks or edge computing, which could reduce reliance on underwater cables. However, for the foreseeable future, the concentration of expertise and infrastructure in this space means that partnerships with established players may be essential for companies needing reliable, high-capacity international connectivity.

Key takeaways

• Underwater cables carry 99% of international internet traffic, making them a critical but often invisible part of global infrastructure.
• Demand for these cables is rising due to cloud computing and AI, creating potential bottlenecks in capacity and deployment.
• The US has only one company capable of both manufacturing and laying underwater cables, highlighting a high barrier to entry in this industry.
• Startups and tech companies reliant on global data flows should monitor developments in this space, as delays or cost increases could impact operations.
• Alternative technologies like satellite networks or edge computing may emerge as complementary solutions to reduce dependency on underwater cables.

FAQ

Why can't satellites replace underwater internet cables?

Satellites are limited by lower bandwidth, higher latency, and less reliability compared to underwater cables. While they are useful for remote or mobile connectivity, they cannot match the capacity and consistency of cables for large-scale international data transmission.

What makes manufacturing and laying underwater cables so difficult?

The process requires specialized expertise in materials science, precision engineering, and international compliance. Additionally, deploying cables involves multimillion-dollar ships and skilled crews, making it a capital-intensive and technically complex industry.

How does the surge in demand for underwater cables impact startups?

Startups reliant on global data flows, such as those in cloud computing, AI, or international services, may face higher costs, delays, or capacity constraints if demand for underwater cables outpaces supply. This could impact performance, scalability, or pricing for businesses dependent on these cables.

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