On Sept. 14, the U.S. Trade and Development Agency (USTDA) said it would fund a feasibility study for a new subsea cable that links Thailand, the U.S., and five other Southeast Asian countries, and bypass the South China Sea. 

“The military conflicts in the Middle East and Europe show that geopolitical crises can trigger cyber or physical disruptions to subsea cables,” says Muhammad Faizal Bin Abdul Rahman, a research fellow at Singapore’s Nanyang Technological University (NTU). “The U.S. and its Asia-Pacific allies believe that China could use similar tactics.”

The project reflects Washington’s continued drive to control the infrastructure that underpins the internet and the AI boom. Southeast Asia may end up stuck between two different tech ecosystems, one led by Washington and the other by Beijing. 

Singapore, for example, joined Washington’s Pax Silica alliance last December, but is also reportedly considering an invitation to join the China-led World Artificial Intelligence Cooperation Organization. (Other Southeast Asian countries are split between the two AI blocs: the Philippines has joined the U.S.’ Pax Silica, while Cambodia, Indonesia, Laos, Malaysia and Myanmar are part of China’s alliance.)

“Southeast Asian countries need to re-evaluate what neutrality means today for each of them, and how policy decisions across sectors collectively determine whether they are too dependent on any major power during times of peace or crisis,” says Muhammad.

Undersea battle

Subsea cables are fiber-optic lines laid on the ocean floor that carry over 99% of internet traffic worldwide. 

Just one cable—the Asia-America Gateway, built in 2009—connects the U.S. and Thailand. The cable is notorious for its frequent outages, especially within the intra-Asia section between Singapore and Hong Kong, with most faults on the segment near Vietnam. When the cable goes down, some Southeast Asian nations like Cambodia and Malaysia have few alternatives for rerouting traffic.

“It is only natural that a new cable be built, both for resilience and capacity reasons,” says Asha Hemrajani, a senior fellow at NTU. “The aging AAG has experienced several serious outages… so it looks like the new cable is intended to be a next-generation successor to it.”

Operators and insurers prefer cables that avoid the South China Sea. China claims sovereignty over much of the sea, overlapping with similar claims from Vietnam, Brunei, Indonesia, Malaysia, and the Philippines. Under China’s domestic regulations, cable work in its “inland waters, territorial sea and continental shelf” requires prior approval and notification.

“Subsea cables regularly require maintenance, and if a cable goes down, it needs to be repaired in a time-sensitive manner,” Hemrajani explains. “Thus, cable operators and insurers prefer to avoid the South China Sea due to additional uncertainty and trouble.”

If built, the proposed Thailand-U.S. cable is estimated to cost over $14 billion, according to estimates cited by Bloomberg, and may also pass through Indonesia, Singapore, Malaysia, Vietnam and the Philippines. (The USTDA has not given its own cost estimate). Thailand’s state-owned telco, National Telecom—which is leading the prospective project—aims to raise capital through an international consortium of co-investors from neighboring Asian nations.

“The U.S. is reportedly planning for potential military conflict around the South China Sea, and so is China,” says Muhammad. “It makes practical and economic sense for new subsea cables to avoid the South China Sea.”

This isn’t the first attempt by Washington to have subsea cables bypass China. The Pacific Light Cable Network, which was initiated in 2015 and backed by U.S. tech giants Meta and Google, was originally set to link the U.S. state of California with Hong Kong’s Deep Water Bay. In 2020, Washington blocked the U.S.-Hong Kong connection, citing national security concerns over PLCN’s connection to its China-based parent entity, Dr. Peng Telecom & Media Group. The cable now links the U.S. with Taiwan and the Philippines—both American allies. 

Other trans-Pacific systems like Bifrost and Echo are routed further south through the Celebes Sea, to connect the U.S. with Singapore and Indonesia.

China, too, is trying to build its own cable network. In 2023, Reuters reported that the country’s state-owned telecom firms were developing a $500 million undersea fiber-optic internet cable network to link Asia, Europe and the Middle East.

But cables are only part of the story. Subsea cables eventually need to come onshore, which they do through cable landing stations, where they then connect to local infrastructure. 

“Washington will double down on extending its influence and control over the full subsea and land based infrastructure ecosystem,” Alex Capri, a senior lecturer at the National University of Singapore, concludes. “And as China races to build its own subsea cables, affected countries may be faced with accommodating two parallel tech stacks. The alternative will be to choose sides, which is Washington’s clearly stated goal.”