Just like global shipping, the internet's physical infrastructure is concentrated in geographic chokepoints. The Red Sea and the Strait of Hormuz are critical corridors for data traffic between Asia and Europe, making them highly vulnerable to disruption by malicious actors.
Geopolitical friction is preventing US and Chinese firms from collaborating on new cable projects, leading to the development of redundant, competing systems. This trend risks bifurcating the internet, creating separate spheres of influence and undermining the original vision of a single, open global network.
Previous fears of a glut in undersea cable capacity have been erased by the rise of AI. The massive data flows required for training and operating AI models are accelerating the need for new, higher-capacity cables, driving the next major investment cycle in the industry.
Despite the advanced technology of fiber optics, the physical repair process for a severed undersea cable remains surprisingly old-fashioned. Ships are sent to the fault location, where they drag a grapnel hook along the seafloor to snag the cable, a method largely unchanged from the telegraph era.
As tech giants like Meta fund critical internet infrastructure, they gain immense leverage over developing nations. These countries face a dilemma: accept the cable and potentially cede control over citizen data, or refuse and risk being left behind in the global digital economy.
With roughly 100 undersea cables cut accidentally each year, the internet remains stable due to immense redundancy. This is achieved through a form of 'coopetition,' where rivals like Google and Meta will purchase backup capacity on each other's proprietary cables to ensure their own services never go down.
Due to inertia and the high cost of building new landing infrastructure, today's fiber optic cables often terminate in the exact same coastal cities as telegraph cables did over a century ago. This historical path dependency creates concentrated points of failure instead of a more distributed, resilient network.
The funding model for undersea cables has shifted from state-owned telecom consortiums to private investment, and now to big tech. Giants like Google, Meta, Amazon, and Microsoft now fund and own two-thirds of all new cables, giving them unprecedented control over the internet's physical infrastructure.