A new arms race is unfolding on the ocean floor

Companies and governments are increasingly waking up to the fact that the future of warfare isn't just in the skies, but also on the ocean floor.

Nations and corporations alike are devoting attention as well as piles of cash to new technologies designed for underwater use, as concerns grow about the vulnerability of critical infrastructure like connectivity cables and energy pipelines traversing the seabed.

It comes amid growing concerns of so-called hybrid warfare, a broad term which can include cyberattacks, energy sabotage, disinformation, and economic pressure, with or without being accompanied by conventional military methods.

"It's the changing threat environment that's brought this to the fore," Katja Bego, senior research fellow at Chatham House, told CNBC.

At the same time, rapid advances in artificial intelligence, drones and autonomous technology are making new approaches to underwater surveillance possible, she said.

From autonomous underwater vehicles to sensors attached to subsea cables, governments and military alliances are exploring ways to better monitor the infrastructure that underpins the global economy.

"Our whole economy is built on top of this," Bego said.

In September 2022, months after Russia launched its full-scale invasion of Ukraine, explosions ruptured the Nord Stream gas pipelines beneath the Baltic Sea. Investigators determined the pipelines, built to deliver natural gas from Russia to Germany, had been deliberately sabotaged.

The incident, alongside damage to subsea infrastructure in other parts of the world like the Arctic and near Taiwan, has focused governments' attention on vulnerabilities that received little attention in the decades following the Cold War, according to Bego.

"This has been neglected for quite a long time, so it's quite a lot of catching up to be done," she said.

More than 1.5 million kilometers of submarine communications cables are in service globally as of early 2026, according to TeleGeography, a telecommunications research firm that tracks global subsea cable networks.

Alongside telecommunications cables and oil and gas pipelines, a growing network of subsea power cables also connects electricity markets and carries electricity from offshore wind farms to land.

Meanwhile, the widespread deployment of aerial drones during the war between Ukraine and Russia has shown how autonomous systems operated from afar can change the nature of warfare. Bego described the maritime environment as "the next logical domain."

Defense companies are now positioning themselves for that shift.

Italian shipbuilder Fincantieri announced in July plans to acquire majority stakes in four companies, for around 600 million euros ($689 million) to expand capabilities across underwater and surface drones, marine surveying and subsea communications.

The company is building on more than a century of submarine expertise to move from what CEO Pierroberto Folgiero calls the "conventional underwater" world into an "unconventional" one encompassing smaller submarines, drones and underwater telecommunications. Speaking to CNBC in July, Folgiero described underwater telecommunications as "the real enabler of this new ecosystem."

Folgiero sees future surface ships acting as "motherships," coordinating networks of vehicles operating above the seabed and throughout the water column.

Fincantieri isn't alone. Major defense groups, including France's Thales, have established businesses spanning sonar, anti-submarine warfare, mine detection and autonomous underwater systems, as large and small firms alike seek a role in the emerging market for operating beneath the ocean surface.

Germany-based defense-tech company Euroatlas is another company with its sights set on the potentially lucrative business of defending the seabed.

It has developed an autonomous underwater vehicle called GrayShark that can travel to an assigned area and carry out a mission without continuous human control, according to Verineia Codrean, the company's chief strategy and partnerships officer.

It's designed to avoid obstacles and follow predetermined instructions when it encounters something unexpected. While inspecting a pipeline, for example, it could identify a mine-like object, report the discovery and wait for an operator to decide whether it should investigate further.

Rather than guarding every mile of cable with warships, Codrean imagines a future with fleets of autonomous vehicles continuously patrolling strategic areas of the seabed and converging when one detects something unusual.

"It is virtually impossible to cover the entire ocean," Codrean told CNBC. "You just need to know which are the areas that are more interesting to have that constant visibility of what is happening there."

She argued that this is fundamentally a problem of scale, as frigates, submarines and maritime patrol aircraft are too expensive and scarce to maintain a continuous presence across the vast areas where cables, pipelines and other strategic assets are located.

"The underwater space domain is gaining a bigger set of problems that wasn't present until now," she said, adding that "from a mathematics perspective, [crewed assets] cannot be everywhere and anywhere where these problems are popping up, either a sabotage or some movement from an enemy submarine."

Autonomous vehicles aren't only being developed to watch infrastructure. Alongside anti-submarine warfare where submarines target other crewed submarines, Codrean points to the emergence of so-called anti-autonomous underwater vehicle (AUV) missions, aimed at detecting, tracking and identifying autonomous and unmanned underwater vehicles operated by other countries.

"What we are building, so are our non-allies or our enemies building as well," she said.

"Because others are also having autonomous underwater vehicles built, you need to be able to classify which are from... NATO-friendly countries or allies, and which are not from friendly countries," Codrean said. That raises the prospect of more machine-on-machine activity beneath the surface.

But Codrean does not expect autonomous vehicles to replace conventional submarines and warships. "I wouldn't be as deterministic to say drones versus drones only, but for sure a much more increased activity from drones against drones until you need a manned asset to step in as well," she said.

Instead, she expects navies to increasingly combine crewed and autonomous systems, making interoperability between them increasingly important.

While Fincantieri's Folgiero said underwater telecommunications is the "real enabler" to the emerging underwater domain, Codrean argued that advances in acoustic and other subsea communications mean the bigger bottleneck is range and endurance.

Euroatlas is also developing a hydrogen fuel-cell version of GrayShark designed for up to 16 weeks underwater or 8,000 nautical miles, though the company has not yet demonstrated that endurance underwater.

Euroatlas says it has signed more than 100 million euros in GrayShark contracts with unnamed European navies. Codrean said the vehicles are not armed, with their missions instead including surveillance, detection and deterrence.

For all the investment and technological advances, a fundamental problem remains – nobody can realistically protect every mile of infrastructure on the seabed.

"I don't think anyone, listening to NATO people, would pretend that [we] can protect a network of a million kilometers plus," Bego said.

Responsibility for protecting that infrastructure is also blurred. Much of the world's subsea infrastructure is owned or operated by private companies, which have traditionally dealt with routine maintenance and accidental damage. But protecting them against deliberate interference or even an outright war scenario increasingly brings governments and militaries into the picture.

Governments are pushing for stronger security measures, according to Bego, potentially ranging from increased monitoring to sensors and deeper burial of cables. Those measures can be costly, however, raising questions over who should pay and where responsibility ultimately lies.

The result, Bego said, will likely require much closer cooperation between governments and infrastructure owners rather than regulation alone.

The investment opportunity is attracting companies on both sides of the Atlantic, while Bego said Russia and China are also investing heavily in the underwater domain.

"There's clearly a lot more money available because of it, because there's just this massive boom in investing in drones," she said.

But operating autonomously underwater is considerably harder than in the air. Visibility is poor, communications are difficult and signals do not travel underwater in the same way they do through the air.

"This is not technology that's anywhere near the level of the drones we see in Ukraine," Bego said.

"Progress is being made, but it's just very difficult," she added. "Tech hurdles are really quite significant."

For that reason, Bego cautioned against seeing autonomous underwater vehicles as a technological solution capable of making the seabed secure.

"It's helpful," she said. "It's mostly about deterrence and signaling. It's good to develop into this field of things. It's not a panacea that's going to fix it."