Panthalassa, a U.S.-based start up betting on ocean waves to power a fleet of floating data centers, announced $140 million in funding earlier this month led by Thiel.

The funding pushes Panthalassa’s valuation close to $1 billion, the Financial Times reported, citing a person familiar with the terms of the deal.

Panthalassa didn’t immediately respond to Fortune’s request for comment.

“The future demands more compute than we can imagine,” Thiel said in a statement announcing the funding. “Extra-terrestrial solutions are no longer science fiction. Panthalassa has opened the ocean frontier.”

Surging AI demand in the U.S. has hit snags with an aging and beleaguered grid system vulnerable to extreme weather. Energy analytics firm Wood Mackenzie noted in a report earlier this year that data center development has slowed down due to limited electricity capacity growth. Bottlenecked by energy infrastructure from as far back as World War II, tech companies are looking for extraterrestrial arenas to build out data centers without taxing available resources.

Panthalassa, sharing the name with the superocean that once surrounded the supercontinent of Pangaea, has designed “nodes” that sit on top of the ocean, with nearly 280-foot-long steel structures extending below the surface. The sphere at the top of the node bobs in the water, with the attached tube oscillating water within it, spinning turbines inside the structure that generate electricity. The structure also holds a hermetically sealed, or airtight, AI server that is cooled by surrounding seawater.

The company spent years designing Ocean-1 and Ocean-2 prototypes, beginning in 2021, and plans to deploy its most recent Ocean-3 system in the northern Pacific Ocean this year, with commercial deployment to follow in 2027, according to the company.

“There are three sources of energy on the planet with tens of terawatts of new capacity potential: solar, nuclear, and the open ocean,” Panthalassa cofounder and CEO Garth Sheldon-Coulson said in a statement. “We’ve built a technology platform that operates in the planet’s most energy-dense wave regions, far from shore, and turns that resource into reliable clean power. We’re now ready to build factories, deploy fleets, and provide a sustainable new source of energy for humanity.”

Thiel’s bet on subsea data centers

Thiel, the billionaire cofounder of Palantir and PayPal, has taken a special interest in the ocean as the next frontier for human development. For nearly two decades, the investor has shown curiosity in seasteading, or the Libertarianism-inspired creation of permanent, autonomous islands on the high seas independent from other countries’ jurisdictions. In 2008, Thiel donated $500,000 to The Seasteading Institute, an organization founded by a former Google engineer and Sun Microsystems programmer to spearhead these utopian-adjacent sea communities.

“It hits such a nerve because in this idea of starting a new country or doing something new, it reminds people that if we had to design a country from scratch—design the state of California from scratch—it would be so different, and there’s all these super corrupt governance institutions we’d clean out,” Thiel said in a 2018 interview.

Though Thiel’s belief in the near-future viability of seasteading appears to have waned, his interest in ocean-based ventures has not. Thiel’s venture capital fund Founders Fund backed Panthalassa in 2018, but Thiel is now investing in the startup through his personal fund, according to the FT.

But like seasteading, scaling AI infrastructure in earth’s massive bodies of water may not see immediate success. While previous iterations of subsea data centers have shown promise—Microsoft’s Project Natick, which ended in 2024, submerged nearly 900 servers in the Scottish Sea and had fewer submerged servers break compared to control servers on dry land—researchers still see risks associated with scaling subsea systems.

“The main advantages of having a data center underwater are the free cooling and the isolation from variable environments on land,” Md Jahidul Islam, a University of Florida professor of electrical and computer engineering who authored a study on the potential dangers of subsea infrastructure, said in an interview last year with the university.

According to Islam’s research, dense water can carry acoustic signals faster than air, making them vulnerable to acoustic attacks. Isolated data centers underwater can also be harder to monitor and, therefore, to identify if a component breaks.

“These two advantages can also become liabilities,” he said.