A Needham developer is seeking federal approval to build tidal-powered, underwater artificial intelligence data centers off the coast of Maine or Alaska.
DeepGreen Holdings LLC filed two preliminary permit applications with the Federal Energy Regulatory Commission Feb. 11, one for the Western Passage in Maine and one for the Upper Cook Inlet in Alaska, according to public records.
Both project proposals combine tidal energy generation with underwater data center facilities, according to the documents. The company says the model is central to its “Green-AI” infrastructure strategy.
“The filings effectively kick off a multi-year period of rigorous environmental and engineering studies,” Louis Wolfson, managing member of DeepGreen, wrote in an email to the Observer. The two locations are located among the most powerful tidal areas in North America.
“Data centers are ‘digital real estate’ that currently face a massive ‘power and cooling’ crisis on land,” Wolfson wrote. “We are placing the computing power exactly where the energy is most dense, and the cooling is free.”
Wolfson’s LinkedIn profile lists him as the owner or president of three real estate companies.
“He was upfront about that. He told me that this wasn’t his core knowledge, but they were looking at it,” said Brian Schuth, city manager of Eastport, Maine, where the company has proposed one of the offshore sites.
Eastport, a city of 1,300 residents on the U.S.-Canadian border, is the easternmost city in the continental United States.
“Without the Atlantic Ocean as well as the coastline, we wouldn’t exist. That’s what we are,” Schuth said, referring to the coast outside his office window. “We are surrounded by the ocean. The ocean is who we are.”
Submerging AI data centers may help keep them cool, but the concept is generally considered experimental. China is currently the only country to have placed AI data centers offshore, according to a 2025 Scientific American article.
Microsoft launched Project Natick off the coast of Scotland to test the performance and reliability of underwater server farms. While hailed as a success, the company retrieved the servers in 2020 for analysis and reportedly canceled the project in 2024, according to Data Center Dynamics, a digital outlet covering data infrastructure.
While the proposed projects would be powered by tidal energy and are sustainable, the prospect of underwater AI data centers has raised fears about potential harm to the environment and marine life.
Microsoft researchers wrote that Project Natick caused localized warming at sea and attracted sea life. A 2022 study published in Scientific Reports found that during marine heat waves, or periods of unusually warm ocean temperatures, the servers raise water temperatures enough to harm marine diversity.
Schuth said a self-sustaining underwater project would avoid drawing on a regional electric grid that “is not in any condition to take up any significant amount of additional energy.” He remained skeptical about the wiring for the underwater AI data center.
“My question to him, and I think this is the most obvious one, is if there’s something sitting out there … and if it’s big data stuff, I don’t think you’re doing it wirelessly,” Schuth said. “Where’s your cable going, and how do you make sure no one pulls it up?”
Schuth was also skeptical about the funding. According to the filing, the permit study would cost $9 million, while the construction cost is estimated at $415 million. The construction costs would be financed via a “Strategic Equity Partnership” of private equity and institutional investors, according to the document.
“The study budget is the necessary investment to move from ‘Moonshot’ to ‘Proven Infrastructure’,” Wolfson wrote in response to questions about the project’s funding. “We are currently in the private exploratory phase regarding funding and partners. Just as with any major development project, the capital stack evolves as the engineering and environmental data are verified through the FERC process.”
“I think we are at a moment of high skepticism about AI, and I think also a lot of skepticism about the intentions and long-range benefits in general,” said Schuth. “And generally speaking, big anything doesn’t play very well in Maine.”
The proposal has also drawn opposition from local residents and members of the Passamaquoddy Tribe, which is part of the Wabanaki Nation, who told the Portland Press Herald in early April that the proposal conflicts with their cultural beliefs and may harm the fishery.
“My philosophy is simple: I am not here to fight. Should we proceed, the Wabanaki Nation would be an integral part of the long-term stewardship of the project,” Wolfson wrote.
Schuth said Wolfson called him the day the filings arrived at FERC, and the developer also contacted state and county officials and the Passamaquoddy Tribe. Schuth said he learned about the Alaska location a day before his interview with the Observer.
On April 14, more than two months after DeepGreen’s filings, the Maine legislature passed LD307, a bill that bars the state from accepting applications or issuing approvals to build or operate a data center until Nov. 1, 2027.
“AI data centers are increasingly drawn to locations with available land and strong connectivity, qualities that Maine is well-positioned to provide,” wrote state Rep. Melanie Sachs, a Freeport, Maine, Democrat who sponsored the bill. “But if these centers aren’t thoughtfully planned and coordinated … they can place extraordinary demands on electric infrastructure, the surrounding environment and host communities.
“Implementing a pause and creating this council will give us the time and space to evaluate how these data centers may affect ratepayers, grid reliability, natural resources and local communities,” Sachs continued.
A spokesperson for Alaska Gov. Mike Dunleavy said as far as he knows, DeepGreen has not contacted the state about the project. Kenai Peninsula Borough Mayor Peter Micciche’s office did not respond to requests for comment.
Wolfson said DeepGreen is studying designs that would be “fish-friendly” and support marine populations. He said the company is also exploring how the project could benefit tribal energy independence and the local economy.
Schuth, a 30-year Eastport resident, has previously lived in Norwood and Newton. He said the project raises concerns about the financial strain on a city government with 14 full-time employees and a 2026 legal budget of $10,000, and recalled a previous attempt where “a couple of places” discussed the possibility of trying to bring a liquid natural gas import terminal to Eastport.
The LNG terminal never materialized, but the city still paid a heavy price. “We ended up having to spend over $40,000 because they went all the way to the [federal] licensing process just to make our voices heard,” Schuth said.
Using the failed LNG proposal years ago as an example, Schuth said the AI data center proposal feels like “it’s another guy with a bunch of money that sees us out there,” and that the town isn’t properly equipped to respond.
“We are not quite defenseless, but we are not equipped to fight with somebody who’s able to spend millions of dollars on an idea before it even gets to the filing stage,” he said.
This story was written by a journalism student in BU’s Newsroom program, a partnership between the university, The Needham Observer and other news organizations in the Boston area.
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