One of the biggest questions facing the global financial markets is whether there is a bubble in artificial intelligence (AI), as the valuations of the big American tech companies like Nvidia, Meta and Microsoft reach stratospheric levels in the trillions.
The surge in demand for AI infrastructure, cloud computing and data centres is also driving up the demand for electrical power, boosting gas demand especially in the United States, and for subsea electrical power to connect renewables to national grids.
AI and cloud computing are also stimulating demand for more subsea data cables to connect the processing power to its users. Both electrical cable-lay and data/telecoms cable-lay are in a sweet spot after a long period of relative under-investment. Whether or not there is a bubble in AI today, cable laying and cable repair vessel newbuilding orders have risen sharply last year, and look set to continue rising this year.
Back in 2021, we first highlighted the renewed investor interest in the cable-lay sector, and the challenges of the aging fleet profile that requires significant newbuilds to replace 20- and 30-year old tonnage built for the "Dot Com" boom and the golden days of global crossings.
No surprise to see that there were two cable laying vessel keel-layings featured in our January newbuild roundup (in Vietnam for CS Genesis and CS Triumph owned by Malaysia's OMS Group and designed by IHC of the Netherlands), and a new order from the Shanghai Foundation Engineering Group of China at domestic shipbuilder Qinshi Jiamei Energy Technology in Nantong for the construction of a new 162-metre long cable laying vessel with a maximum cable capacity of 16,000 tons, to a design by the 708 Research Institute, a subsidiary of the China Shipbuilding Group.
This is because the sector also sits in the middle of both national security concerns about protecting data and infrastructure from hostile states – especially after events in the Baltic where ships’ anchors have “mysteriously” damaged both power and telecoms cables between Finland and Estonia, and at the heart of the demand for data and AI.
Kudos to former UK Prime Minister Rishi Sunak for writing a surprisingly serious and actually quite well-researched paper on the need for the UK to have the naval capability to protects its subsea cables, when he was a backbench MP in 2017. This sets out the vulnerabilities and the reasons for increased naval subsea cable intervention capability succinctly.
Most recently, on New Year's Eve, Finnish authorities intercepted yet another cargo vessel on suspicion of sabotaging damaging an undersea telecoms cable owned by Helsinki-based company Elisa in the Baltic.
This time it was the 2001-built, general cargo vessel Fitburg, which Finnish police officials boarded and brought into the Port of Kantvik. The 132-metre-long, St Vincent-flagged vessel was sailing from Russia to Israel.
Around the same time, Estonia also reported faults on two communications cables linking it with Sweden and on another linking the island of Hiiumaa with the mainland.
The Finnish police reported that they had arrested two of Fitburg’s crew, one of whom was later placed in pre-trial detention, and three other crewmembers were subject to a travel ban, although it is not clear whether this was rescinded when the ship departed. The vessel was eventually allowed to sail for Haifa on January 12 and was scheduled to arrive there on February 1.
Finnish National Police Commissioner Ilkka Koskimäki said earlier in the month that the ship had been dragging its anchor for hours when it was identified in Finland’s exclusive economic zone. Its crew included Russian, Georgian, Azerbaijani and Kazakhstani nationals.
Last week, the Finnish Border Guard announced it was setting up a new maritime surveillance centre in the Gulf of Finland to protect critical undersea infrastructure, backed by fellow Baltic states and the European Commission. Cables are once again in the eye of the geo-political storm. Countries are waking up to the fact that their economies are vulnerable to attacks as simple as dragging an anchor or grapnel over a fibre-optic backbone cable.
Monitoring and observing vessels to ensure that they are not loitering in the vicinity of critical subsea infrastructure is obviously important, but the ability to repair damaged cables and to survey the seabed is rapidly also becoming a key element of national defence capability.
We reported in 2023 how the British Royal Navy had purchased two subsea vessels to beef up its protection against subsea threats. That year, the navy bought the Vard-designed subsea vessel Topaz Tangaroa and an Ulstein-designed subsea vessel from Island Offshore, the 2013-built Island Crown, for around US$50 million.
Island Crown was renamed HMS Stirling Castle and was converted into a mothership for the Royal Navy's autonomous counter-mine units at shipbuilder Cammell Laird in Birkenhead near Liverpool. The ship is homeported at HM Naval Base Portsmouth and is now a full naval vessel after two years of operation by the Royal Fleet Auxiliary (RFA).
The 98-metre-long, DP2-capable, 2019-built Topaz Tangaroa was renamed RFA Proteus in 2023 and was also upgraded at Cammell Laird for conversion to a multi-role ocean surveillance ship for the RFA. The unit acts as a mothership for an array of ROVs and AUVs, and is dedicated to safeguarding "critical seabed infrastructure" and to maintaining underwater surveillance and performing seabed warfare roles.
Last week, a Royal Navy helicopter was dispatched to surveil and chase away the 2004-built, Russian-flagged general cargo vessel Sinegorsk after the latter spent 14 hours anchored less than a mile from five trans-Atlantic undersea data cables in the Bristol Channel.
Sinegorsk had left Arkhangelsk on January 8, anchored in the UK for no reason, and is now off Portugal “for orders” as per its AIS track, although like Fitburg, it has made several port calls to Israel in 2025. Nothing to see there, I am sure.
It is not just the UK that is concerned.
One of the biggest developments that passed me by (and probably many readers too) was the news that the French state acquired 80 per cent of Alcatel Submarine Networks in 2024.
Alcatel Submarine Networks’ fleet is managed by the French ship management company Louis Dreyfus Armateurs and comprises seven cable laying and cable repair vessels: Ile de Sein, Ile de Batz, Ile de Bréhat, Ile d’Aix, Ile d’Yeu, Ile d’Ouessant, and Ile de Molène.
The first five of these are cable installation vessels whilst Ile d'Ouessant and Ile de Molène perform maintenance duties. Ile de Molène was converted from a 2006-built platform supply vessel in 2021 and is assigned to the Atlantic Private Maintenance Agreement Area, which covers the Atlantic, the Caribbean and the Pacific America west coast. The vessel is based in Curacao, reminding us that the vulnerability to damage of a data cable extends all the way across the ocean, not just in national waters.
This is a very sensible and strategic decision by France to bring capability for cable repair and cable laying back into the state's hands after France Telecom was privatised and its fleet of cable vessels was sold off in the 1990s. These are now the Orange Marine fleet (more on that company below).
Italy’s national grid operator Terna also issued a tender for work on the design of a cable repair/subsea construction vessel last year. The full tender is scheduled for issuance later this year with delivery of the vessel expected in 2030. National shipbuilding champion Fincantieri must be well placed for this contract, one would have thought.
Terna is not the only Italian company increasing its exposure to subsea. As we reported last month, Next Geosolutions, through its subsidiary Rana Subsea, has acquired the subsea vessel Siem Day from its Norwegian owner for approximately US$112 million.
Rana also signed a letter of intent with Saipem for the provision of saturation diving services in the Middle East worth approximately US$150 million with a planned duration of 36 months starting a few months from now utilising the newly acquired Siem Day.
Clearly, Europe and the Asian powers are wide awake to the danger of disruption to subsea cables. Russia has invested heavily in offensive subsea capability with its “spy ship” Yantar regularly conducting surveillance against western subsea infrastructure in European waters.
Yantar is operated by Glavnoye Upravlenie Glubokovodnikh Issledovanii from a top secret, GPS-jammed base in the Kola Peninsula, as we reported in October.
China has the successful international cable contractor SB Submarine Systems (SBSS) with an impressive cable-lay and cable repair business, originally founded in 1995 as a joint venture between China Telecom and Britain's Cable and Wireless Group (now the Global Marine Group; GMG).
SBSS operates three DP2 cable laying vessels, Fu Tai, CS Fu Hai and Bold Maverick, fully equipped with both cable ploughs and trenching ROVs. SBSS also owns and manages the only custom-bonded commercial submarine cable depot in mainland China.
The company has been very successful at winning overseas commercial contracts in oil and gas.
In 2024 (before the election of US President Donald Trump), a hysterical lengthy piece in the Wall Street Journal highlighted that the US Government was privately telling communications providers like Google and Meta to be wary of using SBSS. US State Department officials warned that SBSS vessels appeared to turn off their AIS and said that such a move “defied easy explanation.”
At a congressional hearing two years ago, Representative Ann Wagner, a Missouri Republican, said she was, “very concerned about Chinese companies repairing or even having access to undersea cables that are owned by US carriers.”
So given that the UK and France have moved quickly to enhance their subsea infrastructure protection and repair capability, what exactly is the US Navy doing?
America is hamstrung in several ways. Firstly, it has no competent domestic shipbuilding industry that could design or build a cable laying vessel. European yards, design houses, and equipment suppliers have huge clusters of capability and experience; America has next to none.
Secondly, under Secretary of Defense/War Pete Hegseth, the US Navy has been instructed to focus on “lethality”. This is big and sexy and drives proposed investment in the new Trump-class battleships, which are US$10 billion vessels that will take the best parts of two decades to be delivered (if they will be delivered at all), packed full of laser weaponry and missiles for offensive use.
Its other focus has been on the enormous gap in icebreakers and Arctic-capable ships, hence the discussions to build new polar ships in Finland.
The rather boring job of stopping vessels from dragging their anchors over subsea cables is not within the guns-blazing, chest-beating, high tech “beautiful armada” that the Trump Administration wishes to build and deploy against its foes. There is no lethality in protecting a cable and this function appears to have attracted no interest within the administration.
Happy to be corrected here, but I do not see any US initiatives on subsea infrastructure protection. Maybe they are secret, but probably they are not happening because they are too dull and nerdy for a team focused on dramatic announcements and huge force projection.
The final problem is that America no longer has a large cable-lay fleet. Its biggest cable-lay company is SubCom, which was born out of the AT&T submarine systems business. That company was acquired by Tyco in 1997 and then spun off as SubCom, which is now owned by private equity company Cerberus Capital Management.
As we have seen with GMG, now on its third private equity owner, private equity makes a terrible owner for businesses where governments might want large investment and a long-term perspective. Private equity is more interested in milking the cash cow and paying its managers large bonuses than taking a 20-year investment decision to build resilience to support national infrastructure.
Not surprisingly, the most modern vessels in the SubCom fleet date back to 2003, being six 140-metre-long vessels.
So even if America wanted to scale up its subsea cable defence capabilities fast, it lacks the resources to do so, even though the Wall Street Journal has highlighted the vulnerability it has in the cable space.
SubCom may be a great company, but Cerberus is not the right sort of owner for this business.
We see all the problems of private equity ownership manifested in the UK’s GMG. The company just bought the 2001-built Solstad cable laying vessel Normand Clipper, so, ironically, the oldest vessel in the Solstad fleet becomes the youngest in the GMG fleet.
GMG had been chartering the ship since 2021 and it offers over 5,000 tonnes of cable capacity, up to 96 repeaters and a three-metre burial subsea plough for fibre-optic cable lay operations within the telecoms sector. With the sale, Solstad pocketed a one-off gain of US$10 million.
GMG is now owned by Singapore's state-controlled Keppel Infrastructure Fund (KIF). When KIF bought the company in 2025, after years of under-investment and weak leadership, we expected that a newbuild programme would be launched, probably at a Singapore yard.
Buying Normand Clipper is too little too late, but the purchase of the company by KIF reiterates our point that states want and need cable capability. There are few companies with those capabilities, that fleet and experience, and so potentially investment by GMG's new owners could create a very powerful and strategically important resource for Singapore, if the new owners are willing to spend.
Whilst GMG and SubCom are driven in second gear with minimal investment in two decades, others are moving to seize the opportunities.
Prysmian just bought ACSM in Spain for US$183m to bring its capabilities in-house, as we reported. ACSM provides services including route clearance, the removal of unexploded ordnance, and the installation of concrete mattresses to secure cables. The company operates three vessels along with a suite of underwater robots and trenching machines.
There is also a lot of newbuild activity. In November, Orange Marine announced the construction of two new cable ships to strengthen the resilience of submarine cable networks in Europe, the Middle East and Africa.
With these two new ships, Orange said it will have, "the most advanced and modern maintenance fleet in the world." Four ships will be operated in the Atlantic, the English Channel, the North Sea, the Indian Ocean, the Mediterranean, and the Red Sea, "ensuring the continuity and security of essential submarine cable networks across Europe, the Middle East and Africa."
Additionally, the group owns two ships specialising in cable laying and one reconnaissance ship (marine survey) through Orange Marine and Italian subsidiary Elettra TLC. These two newbuilds will be sister ships of Sophie Germain, which was delivered in 2023, and will mainly be dedicated to submarine cable maintenance, although they will also be capable of laying connecting segments up to 1,000 kilometres long.
The two newbuilds will replace Léon Thévenin (built in 1983, based in South Africa) and the Antonio Meucci (built 1987, based in Italy), currently responsible for cable maintenance in the Atlantic, Indian Ocean, Mediterranean, Black Sea and Red Sea.
The newbuild contracts have been awarded to a Sri Lankan shipyard. Deliveries are expected in 2028 and 2029.
Last week, Aquora (the old XLCC), backed by the UK Infrastructure Bank, said that it will order and build a new British-flagged cable layer (and it even put out a nice graphic of the said vessel on its press release, but I do not actually see a shipyard contract signed yet, so please correct me if I missed this).
We have already reported how in Asia Dong Fang is building a new cable laying vessel at Westcon in Norway (as reported in December) and that seems in line with Taiwanese Government requirements, even if it is a private company. OMS of Malaysia is not just building the two IHC-designed vessels in Vietnam, it has also announced a contract with Ulstein in Norway to design and construct two more cable laying vessels, this time with Ulstein's patented twin stern and bow design, for delivery in 2028.
These orders come on top of an already large orderbook. Jan De Nul launched its flagship Fleeming Jenkin last October, and a sister vessel is due to follow in 2027. The company claims the ship is, “the world’s largest cable laying vessel.”
The size of Fleeming Jenkin is a salutary reminder of the huge capacities of electric cables now expected to be laid. The ship is 215 metres long, can carry 28,000 tonnes of cable, and can install cables in ultra-deep waters up to 3,000 metres. Delivery is scheduled for the second half of 2026, and TenneT's 2GW programme is already booked for the vessel.
So, from the privatisation frenzy of the 1990s in cable-lay when the states spun off their telecoms companies and the telcos then spun off the cable-lay marine assets, we are returning full circle. Governments are increasingly investing in cable repair and cable defence capabilities and private companies recognise that two decades of under-investment creates huge opportunities for fleet replacement.
Weirdly, the country at the heart of the AI revolution, the US, is lagging here. It appears to lack domestic cable repair capacity and its navy is focused on high-profile battleships and icebreakers rather than splicing cables and stopping “accidental” incidents of anchor dragging. The world is ever more connected, but that connectedness is vulnerable.
Events in the Baltic and off Taiwan show that vigilance should be paired with a robust cable repair facility. All the battleships in the world are not going to fix the internet when cables are cut, or restore power when interconnectors are severed.