Samanth Subramanian on the Undersea Cables That Keep the Internet Alive

Odd Thoughts is brought to you by VanEck. For years, investors basically forgot about real assets, energy, gold, and infrastructure. But look at what's driving markets now. Central banks loading up on gold, massive capex cycles, currencies doing weird things. These assets are at the center of it. RACS, the VanEck Real Assets ETF, is an actively managed one-stop shop for real assets spanning gold, commodities, natural resource equities, and more. Go to vanek.com slash R-A-A-X pod to learn more fun disclosures later in this episode. the politics, policy and the people shaping the European Union right now. And from London, I'm looking at what all that means for markets, money and the wider economy. We've got reporters across Europe and around the globe feeding in as stories break. So whether it's geopolitics, energy, tech or markets, you're hearing it while it happens. It's smart, calm and to the point. And it fits into your morning. You can find new episodes of the Bloomberg Daybreak Europe podcast by 7am in Dublin or 8am in Brussels, Berlin and Paris. On Apple, Spotify, YouTube or wherever you get your podcasts. Bloomberg Audio Studios. Podcasts, radio, news. Hello and welcome to another episode of the All Thoughts Podcast. I'm Tracy Alloway. And I'm Jill Weisenthal. Joe, I am going to send you a link. Okay. You're going to open it on your laptop, which we have expressly for this purpose, and tell me what you see. Okay. Okay, I'm putting it... This is a fun experiment. We've never done anything like this before. I know, we've never been so prepared for a podcast as to have a link ready to go. It's a map of undersea... It's actually the Encyclopedia Britannica page of undersea cables, and there's a really old-fashioned-looking map here. It looks pretty cool. What does that remind you of? Oh, now I lost the line. I knew this wouldn't work. Shipping lanes? Yes. Oh, okay, good. Yes, that's the right answer. Good, I got the right answer. Yeah, so I've been looking at these maps, and they look remarkably like shipping lanes, even though, upon further reading, it turns out that subsea cables do not precisely follow actual, like, major shipping lanes. But since most of them are going to and from a major economic center, a city or something, they look a lot like shipping lanes. And the reason I bring this up is because I think with everything technological nowadays, whether it's AI or the basic Internet, there's a tendency to think of it as this very ephemeral digital presence in our lives. But of course, as we've been discussing on a couple of podcasts recently, there is an incredible physical architecture, which is the source of all these things, whether it's subsea fiber optic cables that kind of look like shipping lines or massive data centers that cost a lot of electricity and commodities to produce. Undersea cables is one of the most fascinating things to me because there's been a cable right between London and New York for over 100 years. I know. And that's actually why the UK pound sterling rate is called cable. That's why it's nicknamed that. It blows my mind that like over 100 years ago, whenever it was when they first had the telegraph that they were able to string a continuous line from London to New York. Like that blows my mind that they could do that whenever that was like a century ago or whenever. But it blows my mind that they can still do it today. Like it actually, I still find it hard to believe that they can actually have one length of cord that goes under sea this far. Even with all the technologies, I still can't wrap my head around how they do that. Yeah. And some of those cable lines, I think, are armored in various ways to protect them. They're talking about doing like more land fiber optic cables now as well. There's a lot that we should discuss, not just because this topic is incredibly interesting and we've been meaning to for a long time, But also because with all the geopolitical volatility that we're seeing nowadays, you always hear subsea cables coming up as a potential source of vulnerability. Totally. You hear about attacks on them from time to time. And I guess there's probably some redundancies and other ways to route around. But it is weird to think that, like, in theory, you could just like cut off some part of the world from the Internet by clipping all the cables. at least I get that. You could send out little drone lobsters and they like cut the cables on the deep sea bed with their little lobster claws. That's probably literally happening. Okay, we should actually speak to someone who knows about this. We do in fact have the perfect guest. Again, someone we wanted to speak to for a very long time. We're going to be speaking with Samanth Supermanian. He's the author of The Web Beneath the Waves, The Fragile Cables That Connect Our World. He's also the acting manager editor of Equator, which is a new magazine covering politics and culture. Sounds very cool. Saman, thank you so much for coming on All Thoughts. Thank you for having me. I should have said in the intro that you're actually the author of numerous books on kind of, I would say, disparate subjects. So I'm very curious why you decided to cover something like subsea cables. Well, I mean, there's a long answer and a short answer. And the long answer has to do with this essay that I read more than 10 years ago. This was an essay by the science fiction writer, Neil Stephenson. And he had written this piece in Wired magazine sometime in the 90s, 40,000 words long, it took up like virtually the entire magazine, called Mother Earth Motherboard. And that essay had Stephenson, you know, he sort of cast himself in the role of what he calls a hacker tourist. And he goes around the world, kind of looking at places where these subsea cables land and are installed into the earth or let into the sea or repaired. And he meets these like odd people who do this kind of work or did this kind of work back then. And he kind of traces through all of this, a picture of the nascent internet. I mean, the internet was already there, but I guess it wasn't as big as it was now, obviously. But it wasn't even as big as it was in 2005. There was a lot of big data explosions yet to come, but it was clearly something that was burgeoning. And I think Neil Stephenson did such a good job, even in the 1990s, of reminding people that the internet is reliant on this physical infrastructure, this actual cabling that looks remarkably similar to telegraph cables from the 1800s, although, of course, there are big differences. So he wrote this essay in the 1990s. I read it in 2012, I think. And I remember being so entranced by the story that I had to step out to get groceries. And I kept reading on my phone. You know, I read in the shop. I read on the way back. I was walking to and from there. And of course, it struck me that the only reason I was able to load it on my phone as I was walking was because the Internet was carrying this story to me through some undersea cable or another. And then fast forward to a few years ago when there was a big volcanic eruption off the coast of Tonga, which is an archipelago in the South Pacific. And Tonga lost connection to its only international subsea data cable. The mudslide and landslide that kind of came out of the volcanic eruption underwater severed this line and Tonga was sort of plunged into a kind of internet darkness. And that started to make me think, well, what is it like today for a country or a society or an economy to live without the internet for even a brief period? What are these cables like today? How have they changed from the time that Neil Stephenson wrote this essay in the 1990s? Who lays them now? Who owns them now? Has the funding changed? Do governments play a different role, similar role? And I kind of wanted to find all of this out. And I wanted to use Tonga as this kind of little test case of what it was like for a country to live without the internet for a while. And that's why I pitched the book. So there's that famous phrase from Ted Stevens, the senator, that the internet is a series of tubes. Yeah, it is, though. I never understood why everyone made fun of the guy. That's literally what we're talking about. It is a series of tubes. Okay. Maybe they're like pipes or cables, but like it never really seemed that wrong. I think the confusion comes with wireless, right? Where you're holding your cell phone and it's like, well, my cell phone isn't actually attached to anything at the moment. So it's hard for people to wrap their heads around. I always thought he was unfairly maligned. Talk to us about the process, the very simple explanation of how a long undersea cable is laid and how much is it fundamentally similar or different to when that first famous telegraph cable was laid between New York and London? Well, the cables themselves are very different. I mean, the first telegraph cable was made of copper and you kind of send pulses of electricity through it and that comes out of the other end and it's kind of decoded. The modern fiber optic cable is a real technological marvel. I mean, I haven't stopped marveling at it since I started researching this book. The best cables or the ones at the bottom of the ocean are just a hair thick, just literally the thickness of a human hair. They're made of highly purified glass. And down that cable, you send sort of little pulses of light, lasers, essentially. And they kind of bounce around the inner walls of the glass and they come out at the other end and you can decode them. And what they do these days, there's a long name for it called wave division multiplexing, where they send different frequencies of light encoded with different streams of data. And so that kind of bounces around the glass at various speeds. And then it comes out of the other and you kind of suck it out and you code it all back together and you kind of read the information out that way. And that has kind of exponentially increased the amount of data that a cable can carry. You know, these cables are produced by just a handful of companies around the world. So there's a little bottleneck over there in terms of technological capacity to produce these cables. And then there's people who find the money for these cables. So that used to include state-owned telecom companies. Then it included private investors sort of raising money from a bunch of places. Now, as we'll probably talk about, it's mostly big tech companies paying for it out of their own wallets because they can afford to. And then they would fund a survey ship to go out and see what the best route for the cable would be from, say, London to Lisbon to Cape Town to, I don't know, the UAE. And then the survey ship would come back and give you the best possible route. and then a cable-laying ship would go out, make multiple trips, and just slowly, very slowly lay the cable along exactly that route. And you have to do it that way because too fast and it might snap, too slow and there's too much slack in the cable. And so you really need to kind of find this optimum speed at which to travel And it really funny there one company in the entire world that makes the kind of software that all these cable ships use that determine the ship path the ship speed, all of this stuff, just so the cable is laid just so. Just to be clear, quick question, is it basically, whether we're talking about the Victorian era cable or now, is it a ship with a giant spool, basically, that slowly unwinds and moves? That's basically it. Yeah, I mean, that hasn't changed. I mean, there's a couple of other things that haven't changed, but that definitely hasn't changed. They call them a drum or they call it a spool, but essentially wind the cable around the spool and then you load it on board and then you set off into the high seas. So so that part of it hasn't changed. Of course, the cable is much lighter now, so you can load a lot more cable onto it because it's not sort of thick metal. Sorry, I realized we kind of skipped ahead. But for people who who do like to malign Senator Stevens on his tubes comment, why is it that we can't just send data all through cellular means? Why do we need fiber optic cables at all? You can definitely. I mean, you can use satellites. And in fact, satellite phones have been around for a long while. Garmin makes all of these satellite enabled devices and you can download weather data and other stuff onto it. it's just that the volume, the sheer volume of data that we ingest on a daily basis, you couldn't fill Earth's orbit with enough satellites to take all that data up. I mean, think about what it means. It means everybody's Netflix streams and everybody's Zoom calls and everybody's texts and phone calls and day trades and PowerPoint presentations that live on the cloud and data servers that serve other kinds of things. Everything is essentially on a cloud somewhere. And there's so much data out there that there's not enough satellites that could process. Okay, that makes sense. So the other thing I really wanted to ask you is who actually makes these decisions about what gets laid and where and who's financing it? And I know you mentioned that big tech nowadays pays for most of it, but I imagine that must've changed throughout time, right? If we're thinking back to that first transatlantic cable, maybe it was wealthy industrialists trying to do something nice for the world. I don't know. Maybe it was governments pressing forward with it. More likely it was private companies. But the role of who's funding and planning these things must have changed throughout time. It definitely has. I mean, in the 80s and 90s, and I mean, I mean, the 1980s and 1990s, a lot of these telecom companies around the world were state owned. And so they would kind of figure out that they needed a cable to run from, let's say, London to Portugal to three African countries and then onwards to Singapore, as an example. So the telecom companies in each of these governments would come together and they would say, well, look, this is how we want to lay the cable. This is how much money we can put up. In return, we get this much bandwidth and we can kind of sell that on to our customers. And so these companies would form essentially like a consortium. And that was the consortium model was popular for a very long time. And in the 1990s and the early 2000s, you saw this wave of privatization around the world. All of these telecom companies were hived off into private companies. And suddenly, at the same time, there was also this growth of the investor-led model. Like an investor would say, this cable looks like a good business idea. I will go out and raise money. And then I will come back to these telecom companies and say, look, I'm willing to lay this cable. How much bandwidth do you want to buy from me? and they would kind of apportion bandwidth in that way. And so that model prevailed for like much of the 2000s. And I think it's only about seven or eight years ago that big tech companies, by which I mean Google, Meta, Amazon, and Microsoft, A, grew so cash rich that they could afford these cables. So for example, a transatlantic cable now from London to New York would cost about $500 million, which is a lot of money still for you and me. but maybe not that much for Google. And so they started to fund these cables because, rightly or wrongly, they thought, look, data is the lifeblood of our business and it makes more sense to build this infrastructure ourselves. And so now we got to the stage, or when I was researching this book, it got to a stage where two out of every three new cables were being funded and owned, either in part or in full, by one of these four tech companies. And that has enormous sort of implications for data privacy, data security. I mean, sort of who controls your data, but also like who controls who gets the Internet. Data centers need electricity. AI needs copper. Reshoring needs steel. And gold's run may tell you something about how the world is repricing money and debt. All of those point back to real assets. The RACS ETF is an actively managed one-stop real asset shop from gold to commodities to natural resource equities, adjusting as conditions change. Visit vanek.com slash raaxpod to learn more. An investor should consider the investment objective risks, charges, and expenses of the fund before investing. To obtain a prospectus and summary prospectus, which contains this and other information, visit VanEck.com. Please read the prospectus and summary prospectus carefully before investing. Racks is distributed by VanEck Securities Corporation Distributor. The Bloomberg This Weekend Podcast. News, politics, and the lighter side of Bloomberg. Forget healthspan. Midlife men face pressure to extend hotspan. Hotspan. Yeah, so millennial men, you have to stay hot for like several more decades, David. OK, so you need to work on this. I got to work on that. This is like a journey. This is a really not so subtle way of telling me that. The Bloomberg This Weekend podcast. Subscribe today on Apple, Spotify, or wherever you listen. When the infrastructure of the Internet was first starting to be built out, particularly in the 1990s, there was a popular parallel to the railway booms, etc. And it's sort of similar economics and connecting locations and all that. Rail is kind of a natural monopoly. You know, if you want to have a rail between New York and Chicago, you don't need five separate tracks owned by separate companies all right next to each other. It's sort of wasteful, etc. Wait, let me just say as a regular Amtrak commuter, I do wish there were multiple tracks. You wish there were competition, but there's never going to be, right? That'll just never happen. There are going to be four tracks between a random town in Connecticut and New York. One can dream. One can dream. To what degree do the economics of this replicate? How much redundancy is there? How many different cables are there in some cases along exactly the same route? To what degree does the natural monopoly effect either replicate or not? Well, there's a considerable amount of redundancy built in because I think the deal here is this. even if Google owns, for example, one transatlantic cable, and even if it, let's assume, hypothetically, it funnels only Google-based data through that cable. So let's assume it funnels Gmail and Google Meets and all this other stuff. Only Google data is going through that cable. This never happens, but we'll let it ride for now. It is in Google's best interests to buy redundancy on another cable because that cable might go down. And in a similar way, it is in Meta's best interest to buy redundancy on a Google cable, just in case a Meta cable goes down. So there's a lot of redundancy built into the system. There's between 500 and 550 undersea cables around the world. Many of them are sort of clustered around these, not surprisingly, these big areas of economic activity. So Western Europe to the eastern seaboard of the US, Southeast Asia, China and Southeast Asia, the Gulf and then India. So these are heavily trafficked routes, and there's a lot of cables that traffic them for the simple reason that redundancy is important. We can think about the fact that every year, roughly 100 cables get cut around the world. Most of these are accidents. There might be a ship that throws its anchor overboard and cuts a cable by accident, or it might be that a fishing boat is trawling the seabed and it hooks a cable and snags it and cuts it. So think about 100 cuts every year, and yet we don't experience nearly that order of internet outages, right? And part of the reason is, of course, we have redundancy in the form of land cables, which I haven't really talked about in this book. But there's cables coming to the US from Canada and so on. So that takes up a share of the traffic. But also there's redundancy in the marine cable ecosystem itself. So like if one cable gets cut, there's enough cables crossing the Atlantic, for example, to take up the burden of the data that was severed. Actually, this reminds me, the other thing I wanted to ask you is how much does geography play into these decisions? Because again, going back to that chart, they very much resemble shipping lanes. So getting from point A to point B, presumably as fast and efficiently as possible. But also one thing I learned in researching for this episode is that Egypt apparently is a big, I don't want to say choke point, but like a major center for fiber optic cables in much the same way that it's a major center for containers shipping through the Suez Canal. So how much does just pure basic geography actually inform the decisions of where these cables get laid? Oh, it's a big deal. I mean, first, there's undersea geography, right? I mean, the topography of the ocean floor is obviously not flat, flat, flat. There are crevasses and gorges and there's currents that go one way or another. There's like steep lips of rocky cliffs. And so you have to kind of avoid all of this. You know, Tonga, which I mentioned earlier, has the unfortunate situation of sitting in that Pacific ring of fire. So there's an underwater volcano not far away and that's liable to break its cables. And it has in the past, even before the one that I talk about. So undersea geology, geography, big deal. But even overseas geography is a massive deal. So for example, if you want to come from Asia to Europe, as with a ship, it's much cheaper to come through the Suez Canal, rather than to go around around South Africa. And, you know, in the Neil Stephenson essay, I talked about, he makes a big deal out of this is a really elegant way. he goes to Alexandria, where a bunch of cables are sort of crisscrossing over from Asia to Europe and vice versa. And he talks about how Alexandria is at that point kind of like a storehouse or a hub of information very similar to how it was back in the day when the library of Alexandria was still in place. So there's this parallel with ancient history. But you know, Egypt, you bring up Egypt and Egypt is a really good example. The other good example is something that's very much in the news now, which is the Strait of Hormuz. And just as it's very convenient for ships to take that path in, so it is for cables to take that path in. And the Red Sea and the Strait of Hormuz are both choke points as you say again in which if a malign actor sort of wanted to really cripple the global internet they could go down there use your lobster drones that you talked about and clip every single cable that runs through the ocean floor over there Wait, can I just ask on that? So when I look at the map of subsea cables going across the Strait of Hormuz, it's like Saudi Arabia connecting to, I guess, Iran. Can they cripple the global internet by snapping those cables in particular, or would it just cripple the connectivity between the countries that are clustered around there? Well, I mean, it would definitely impede the countries clustered around there. But we also have to remember that the internet doesn't function like a highway in the sense that the fastest route between two points is not necessarily the shortest route. So for example, if I'm sitting in London, and I'm sort of pinging a server in, let's say, Portugal. It may well be that at that particular moment, and this router is making the decision for me, the shortest route is to France and then onward to Portugal by land rather than through sea throughout. I see, okay. It may also be that I live in Saudi Arabia, but I'm a Gmail user, and my Gmail data is being stored somewhere else. It's being stored maybe in Western Europe or it's being stored even in the US. You don't know which server. your data lives on at all. And so when you cut a bunch of cables that service that particular part of the world, you're also essentially forcing the rest of the internet to reroute itself constantly until these cables are fixed. How does cable repair work? Oh, man, it's so old school. I mean, I was kind of shocked at this. I thought there would be underwater, unmanned underwater vehicles and so on and so forth. But actually, a lot of it is just exactly how telegraph lines were fixed back in the day, which is that you send a ship out to where you think the cut is. And obviously now our sense of where a broken cable might lie is much, much sharper than it used to be in the 1800s. But once you get there, you throw a grapnel hook overboard and you kind of drag it along the seafloor and you hope that it snags the cable. And sometimes you have a bite and you pull it up and it's caught something else entirely and you chuck it back into the ocean and you try again. And so this is essentially how all ships do repairs these days. And of course, once you get the cable on board, it then jumps back into extremely sophisticated gear. So there's a lab on board the ship that is built to splice sort of glass fiber optic cables together. It's stabilized even in a very rocky sea. It can sort of work with astounding levels of stability. There's a clean room. And so you kind of do all of this stuff And then you carefully lay it back into the ocean in the exact coordinates where it used to be. And you test it and you test it again and again until you make sure that it works. So we know that cables can be cut mostly by accident, but occasionally by bad actors. But as you mentioned earlier, there are redundancies built into the system. What are redundancies that I guess we're not as attuned to at the moment? Like, what are the weaknesses that we should be really thinking about? well i mean one of the weaknesses this is not a weakness from the internet's point of view maybe although some people might beg to defer but i think this earlier point that i raised which is the dominance of four essentially american tech companies in the cabling world is a weakness in one way it kind of shrinks the internet because it the internet then depends on where these companies want to lay cables and people rely on them for who's going to get served by the internet and who isn't. There's an example that I cite in the book about the longest cable laid anywhere in the world. And this is a cable called 2Africa. And it's funded and owned, I think, almost entirely by Meta. And Meta, therefore, I think, makes the decisions of, well, which West African countries should we land in? Now, West African countries and Africa in general, they're very underserved by the internet. I mean, this is sort of an internet deficient population. And for any economy today, I think the internet is sort of, it's a prerequisite. You can't develop and grow without being online as much as everybody else is in the West. And so for the government of West Africa, of Cote d'Ivoire, for example, this presents a real dilemma. On the one hand, do they welcome Meta in and say, you know, of course, feel free to land a cable on our shores, but we have these kinds of conditions that European countries have. We want our citizens' data to be stored on servers on our soil. And this is something that European countries have been able to demand and get quite often. But unfortunately, the Cote d'Ivoire government has much less leverage than any Western European nation. And so, for example, if we were to tell Meta that, it runs the risk of Meta saying, well, that's fine. Maybe we don't want to land in this country after all and loop somewhere else instead. And so then there's a real dilemma. I mean, do they sort of look out for the privacy and data security of their citizens or do they give their citizens expanded internet access, which is really what they're craving? And I think this is a weakness. It gives a lie to the old sort of utopian model of a free, open internet. And as in many other ways, which we talk about all the time these days, I think this also actually sort of closes off the internet in some sense and kind of suffocate certain people who want to get online. Joe, I was trying to think of a really remote place in the world that might not have fiber optic cable yet. And so I looked up Kiribos and it turns out there's a cable that's supposed to have become operational funded by the US, Australia and Japan in 2025. But I can't see anything about whether it actually did start working. There you go. There must be some Chinese company that's competing with Meta and all these going to the developing world and African LATM and saying, you don't have to trust these big tech giants. We'll do it and we'll do it cheaper, et cetera. That must exist, right? There is exactly one. Well, there's two, I think. But the main one is called HMN, which is a spinoff of Huawei. And HMN has been in the cable business for a while now, I think more than a decade. And HMN doesn't really own cables outright. HMN is kind of like these two or three big companies, including Subcom in the US, that lay cables. They kind of go out there and they lay the cable for a corporate customer. And so you could easily go to them and say, why don't you lay our cable instead? It'll be sort of cheaper than these American companies that do it. The problem here is that as for the last six or seven years, Chinese tech companies have been on sanctions lists around the world after the first Trump administration put them there. So to go out and engage HMN and to ask Huawei to come and lay a cable is to sort of risk going against that sanctions list and therefore risk all kinds of punitive measures being enforced against you. There used to be a time, the idyllic days, about eight or nine years ago, when Western companies and Chinese companies would come together in consortiums and lay cables jointly. They would kind of bear part of the burden and they would figure out who was going to do the actual laying and how much bandwidth people would get. Two or three of these projects have actually been frozen. In one case, the cable has actually been laid, but nobody can switch it on because the U.S. government doesn't want that to happen because a Chinese company is involved. In two other cases, I think the mapping was done, the funds were committed, and then they had to kind of pull everything back. There hasn't been a new cable laid between China and the U.S. direct in years, in years, even though traffic between these two countries has never been greater. So you have to route everything now through the Philippines or through Singapore. It's like a very, very long way around to go from Chinese East Coast to the West Coast of the U.S. So none of this is, of course, efficient in any way or desirable in any way. But even more than that, I think people in the industry start to worry that something like a bifurcation of the Internet is going to start setting in. By which I mean that if there's a particular part of the world that needs cabling and the Americans want to cable it but don't want Chinese involvement and the Chinese want to cable it as well, there will essentially be two parallel cable systems running in that part of the world. Now, this isn't parallel in the sense of redundancy. This is parallel in the sense of superfluity. You don't need both of them, and yet you have both of them. And so what happens to the internet there? Does it get fractured and split along these two cable systems? What then happens to the promise of the internet, which, as we said, was conceived as a free and open access kind of system to link the world? And so I think there are people in the industry who talk to me quite a bit about their anxieties for just how the internet might be bifurcated this way. It came up that most of the damage that happens to undersea cables is probably by accident, fishermen, whatever. But is there a measurable increase in intentional sabotage of cables that we've seen? I mean, people within the industry seem to think so. And I think governments seem to think so as well. And so we've seen an amping up by many degrees of the kinds of protective measures that governments and companies accord to these cables. So the UK, where I live right now, a few years ago, they announced that they would have two military naval vessels permanently on patrol around the island to protect not just undersea data cables, but also power cables and oil and gas pipelines. The Baltic nations and the Scandinavian nations have their Coast Guard patrols on higher alert than ever before because they think Russian ships are out there to cut these cables in acts of what is known as gray zone warfare. The Taiwanese government is paranoid that China will eventually, you know, in some kind of act of war, cut every single one of the 15 internet cables coming from overseas that land on Taiwanese shores. So I think there's like a real anxiety surrounding this particular act of malicious damage. This, of course, goes along with the fact that there's plenty of other anxiety about geopolitical conflict in this day and age. But I think countries and governments are acutely aware that this is one extremely effective way of crippling economies that a malicious actor could undertake at virtually no or little expense. So I'm looking at a headline right now that says Saudi Arabia, Qatar and the UAE are financing competing data corridors through Syria, Iraq, and East Africa to try to bypass the Strait of Hormuz to avoid the problems we've been talking about. What are the things that governments or private companies can actually do if they're worried about bad actors out there who might be attacking this vital infrastructure? Well, one thing to do is to build out more redundancy. And I don't mean just laymore cables If you look at the map of the telegraph cables of the late 1800s and you look at the current map of undersea cables you see that they kind of similar I mean they almost the same except for this big new thicket of undersea data cables that has come up in East Asia and Southeast Asia And part of the reason for that is out of habit or inertia or reasons of cost efficiency, cables still land in pretty much the same places that they did 100 years ago. So I'm from India, for example, and many, if not all of the undersea data cables that land in India today, land in Mumbai on the West Coast or Chennai on the East Coast. And that's exactly where the telegraph cables used to land a century ago. I asked many people as to why this is, and you know, it's just easier. You have the data centers there already. There's economies of scale. So all you have to do is just get an extra cable on there and you have the rest of the infrastructure ready to go. But maybe your solution lies in finding other places to land, other places in which this data infrastructure can be protected. That's one option. The other option is exactly what you said right now, which is to find alternate routes. But this is not easy either. I mean, the reason, for example, that all these years, cable companies continued laying through the Strait of Hormuz and didn't go through Syria is because Syria was a hotbed for conflict. I mean, it's very difficult to imagine laying a cable through Syria circa eight years ago or nine years ago, or laying a cable through Iraq circa 25 years ago or indeed 30 years ago. These were places where geopolitical sort of turbulence made it very difficult to ensure the security of the cable. But yet, as we see now in the headline you read out, people are being forced to reconsider these other routes, which I think is a good thing as well. You mentioned that it's just not plausible right now to replace all of this infrastructure with basically satellite internet. The capacity doesn't exist for all kinds of reasons. You know, the Elon, I was going to say the Elon Musks of the world, but there's actually one Elon Musk, but you know, he's sort of in a category of his own in many respects. But like, is there a vision? Are there people talking about the prospect that one day the entire internet could truly be wireless? I mean, they find ways, 5G, they find ways to optimize wireless connectivity that are significantly better than they were five years ago, certainly 20 years ago, etc. Is anyone talking about a post-cable future? No, I don't think anybody is. And the reason for that is however much satellites have improved, and they have a lot. So for example, in the 16 months in which it didn't have cabled internet, one of these outlying islands of Tonga just relied on starlings throughout. And that was very useful. But the problem here is that however much satellites improve, our appetite, our sheer thirst for data is just going to improve exponentially. We're seeing that now with the AI boom and the fact that all of this training data is also sitting on servers in one place and we're calling it up on Claude and ChatGPT and other kind of engines on our laptop. And so this is a new kind of use for data and a new kind of data flow that wouldn't have existed five years ago. So we've clearly already seen this explosion of additional data burdens on the cabling industry. And so I think, realistically speaking, nobody thinks that we can please replace all our data infrastructure with satellites. I think cables are here for a good long while yet. This was going to be my next question, actually. So your book came out, I think, just in October of last year. So still relatively new. So how does the rise of AI, the hyperscalers, the data centers actually change the trajectory of the subsea cable world? I don't think it changes the trajectory so much. It just kind of accelerates it. I mean, there was already, as I mentioned earlier, some of these big tech companies that were laying cables of their own. All those big tech companies are now engaged in their own kind of AI efforts and often very big, large scale ones of that. And so I think like the need for these cables and the need to lay more cables and at a faster clip is only going to increase because I think you're going to have more AI training data centers out there. You're going to have more flows of data. And so people were kind of worried for a little while, maybe about five or six years ago, people were talking about the fact that maybe there was a lot of cables out there right now. And that maybe we didn't need to lay any more new cables for the foreseeable future because we were kind of set. but the AI boom has changed all that. It is also true that the cabling industry follows a similar trajectory to the world economy. When there's a recession, it goes down, people stop laying cables because it's very expensive to finance as a project. After the dot-com boom, for example, in early 2000 and the dot-com bust, there was a period of stasis that lasted for almost like five years. There was all this extra cabling that had been ordered up, but nobody was laying it because it was just too expensive. So I think part of it is cyclical and it will follow the trajectory of the economy itself. But I think as far as the AI revolution or the AI boom goes, as long as that persists, I think we'll still need to see more and more cables being laid just to be able to make this entire project possible. One last question I have. So one of the reasons why cable, going back to the old days, exists is for finance specifically and having information about trading in one place and another at roughly the same time making markets more efficient. Another thing is corporations, they don't use the public internet for a lot of their communications. They use private intranets, which are faster and more secure and safer. Are there examples of like, I don't know, JP Morgan, they have offices in London and they have offices in New York. wanting to have purely dedicated cables that is not the public internet, but is essentially a very large scale expansion of their private internet? No, I don't think that exists yet. I mean, there have been instances in the past, I think, of financiers deciding that they want to lay their own overland cables. I can't remember which book it was. I think maybe it was Rocket Boys, but it was a Michael Lewis book about flash traders. Flash boys, that's right. That opens with the laying of a cable over land, not over sea, not under sea. But, you know, that does exist. But I think the only sort of big entities that decide that they need their own cables and they're going to lay them and exclude everybody else from them are the big militaries of the world. So the U.S. military has its own cables. The Chinese military has its own cables. They have their own contractors for that. And none of the public internet travels down them whatsoever. What's your favorite subsea cable? Oh man, there's a really short one that almost shouldn't exist because it's so short, but I feel like it's so cute because it does exist. It's, I don't know, maybe 14 miles long. I'm looking this up in my book now and it goes between the Isle of Man and Northern Ireland. It's 41 miles. So it's not super short, but it just feels like it's one of those cables that That was laid only because it demonstrated just how cost efficient these technologies were. All right, Samantha Supermanium, we're going to have to leave it there. But thank you so much for coming on All Thoughts. That was super interesting. Thank you so much. A lot of fun. So, Joe, that was fascinating. There's a lot to kind of pick over in that discussion. I'm very interested in how we, I mean, it's sort of a parallel of the global economy, isn't it? Where you used to have consortiums who would work together to build these things. And now it's just sort of one of four very large tech companies that are doing most of it. The other thing that I was thinking about is just, I didn't realize the militaries had their own cables, but again, it makes a lot of sense. Yeah. No, I love that topic. Like I said, I still think it's like one of like the great marvels. Like, there's a lot of miles. Yeah, except we can't actually marvel at it because it's underneath miles and miles of the ocean. Well, I've like. You can't go and look at it. That's the problem. I've pulled up the BBC website, for example, and so I kind of can appreciate. You looked at that map. No, no. I mean, I'm literally, I've been to websites from other countries, so I sort of marvel at the speed with which they get to me. It really just blows my mind. And the other thing that's just from a technical standpoint, not an economic or geopolitical standpoint, the fact that like you can send a beam of light through a thing and it bounces around this tube and then it winds up in exactly a configuration that can be recombinated in exactly where it starts. That never ceases to blow my mind, that fact. But the other thing I was thinking about was Samantha mentioned that there was a period where no new subsea cable was being laid. Yeah. Partially because it was a recession and people don't want to spend a lot of money. But also because it reminded me a lot of electricity in the power industry where like the loads needed by the population start to flatline. And so we don't really invest in it for a while. And then suddenly there's a technological advance like AI. and suddenly we need to, we're all thinking about our electricity needs going up. Feels very much like that. There's the thing about the dot-com era, which is that like in 2002, it was like, oh, we're never going to use all this cable. And then by like three years later, they're like building it again. But like the dot-com era looks much less crazy in retrospect because they were all completely correct about how big the internet was going to be and how much demand was just, it ended up just being a slight timing mismatch more than anything else. Technology can be underhyped and overvalued at a single point in time. That's right. That's what I keep saying. All right. Shall we leave it there? Let's leave it there. This has been another episode of the All Thoughts Podcast. I'm Tracy Alloway. You can follow me at Tracy Alloway. And I'm Jill Weisenthal. You can follow me at The Stalwart. Follow our guest, Samantha Supermanian. He's at Samantha underscore S. Follow our producers, Carmen Rodriguez at Carmen Armand. Dashiell Bennett at Dashbot. And Kale Brooks at Kale Brooks. And for more Odd Lots content, go to Bloomberg.com slash Odd Lots. for the daily newsletter and all of our episodes. You can chat about all of these topics 24-7 in our Discord, discord.gg slash odlos. And if you enjoyed this conversation, if you like it when we talk about subsea cables and lobster drones, then please leave us a positive review on your favorite podcast platform. And remember, if you are a Bloomberg subscriber, you can listen to all of our episodes absolutely ad-free. All you need to do is find the Bloomberg channel on Apple Podcasts and follow the instructions there. Thanks for listening. Thank you. Thank you.