The Scoop
Large corporations are shopping for underground bunkers that can survive a nuclear blast to protect their data centers and C-suite employees as geopolitical tensions rise. The first adopters are primarily cryptocurrency firms, companies that build the facilities told Semafor.
Larry Hall, owner of Kansas-based Survival Condo, said he recently priced an underground data center and executive suite space to a crypto company for $64 million. Survival Condo counts eight companies in the planning stages of building bunkers, three of which are competing to purchase an existing 150,000-square-foot facility in Kansas serving the same purpose — a project started by a Big Oil billionaire who died before it was completed.
The pitch is the apocalypse. “The nuclear clock is moving closer to midnight,” Hall intoned in a telephone interview from the company’s Kansas bunker facility, a 54,000-square-foot residential space outfitted with a rock wall and hydroponics farm. “The more worries there are in the headline news, the more people look for solutions.”
Part of the heightened appeal for bunkers is the ever-growing value of data. The company Iron Mountain, which now describes itself as an information management firm, got its start offering secure storage in a depleted iron ore mine to banks amid the first wave of nuclear fears in the 1950s. (The television show Bad Robot includes an anarchist attack on its fictional doppelgänger in the hopes of wiping the global financial slate clean.) Iron Mountain now rents out 330,000 square feet of data center space in a former Pennsylvania limestone mine, serving finance, government, and healthcare industries, according to its website. It also stores government employee retirement papers — a practice recently targeted by Elon Musk’s DOGE as outdated.
Safeguarding the physical aspects of data — server racks, power systems, cooling equipment — can help prevent economic disruptions. The market got a taste of what a major crypto crash looks like when FTX filed for bankruptcy and its executives faced fraud charges in 2022. Other crypto firms took a hit, but the financial losses and reputational harm spilled over into banks, venture capital, and fintech as well.
Companies are hard-pressed to protect their data on domestic land. Though nuclear threats have long existed, the increasingly frayed relationships between Western countries and adversaries like Russia and North Korea have renewed bunker interest. European customers fear the conflicts in Ukraine and the Middle East may soon hit closer to home. Natural disasters have also taken their toll in the US in recent years, exacerbated by the effects of climate change.
A bunker built 200 feet underground with nine-foot-thick concrete walls, as Survival Condo builds them, could provide refuge. The company models its facilities after the Atlas-F missile silos created during the Cold War and designed to withstand a Soviet attack. While the facilities will still face damage from a direct missile hit or one within about 1,000 feet, a warhead dropped further than that will likely leave the structure sound, said Jonas Mureika, a physics professor at Loyola Marymount University.
Some data centers span millions of square feet and would be difficult to place underground, but companies can still store a significant amount of data in the multi-story facilities built below ground. An enterprise server node, about the size of two pizza boxes, can store dozens of terabytes of data. Meanwhile, one terabyte can fit the entire Bitcoin blockchain and leave room to store photos.
The facilities operate independently — generating their own power, filtering their own air, and producing their own water. They draw from multiple energy sources, including diesel tanks, wind turbines, battery banks, and nuclear reactors, meaning that in the event of a disaster, the center could continue operating for at least a few years, Hall said.
But having the safety of bunkers comes with a cost. The cheapest data center, plus executive suite space, that Survival Condo has priced was $45 million, Hall said. It includes 11 floors of living quarters and four floors of data center space — one that would be operational at the start and with three floors for expansion.
Know More
The security of tech facilities is a key consideration as the world’s biggest companies build out their artificial intelligence infrastructure, and storing data centers underground has its practical applications. Temperatures are significantly lower sub-terra, reducing the need for additional equipment and energy to cool servers. It isn’t realistic to put every data center underground, but companies may be able to keep their central systems or most important data in bunkers. Hall also foresees demand from the quantum computing industry because the devices are much smaller.
Cory Hubbard of Missouri-based Defcon Underground Mfg. has also received several inquiries from companies, including those in the crypto world, about building underground space for data centers in recent years, although he hasn’t moved forward on any projects, he told Semafor.
Terra Vivos, which primarily sells residential units in a South Dakota bunker community built as a military fortress in 1942, is working with science and medical companies to secure a different kind of data — DNA, stored in secured cryovaults beneath the earth’s surface.
“Companies who wish to safeguard their data or their products — you can do everything in your power above ground, but until you get that last box checked of putting it underground and safe, you only have so many assurances,” the firm’s executive director, Dante Vicino, told Semafor.
None of the bunker executives could disclose the names of the buyers due to nondisclosure agreements.
Step Back
Attacks and natural disasters have taken their toll on technological infrastructure in the past.
During the terrorist attacks on Sept. 11, 2001, data centers in downtown Manhattan were damaged or destroyed, including those of Merrill Lynch and Marsh McLennan, causing significant disruptions. In 2012, flooding from Hurricane Sandy took down a large portion of Verizon’s New York communications infrastructure, leaving some cell phone users offline. In July 2022, Google and Oracle data centers in London shut down for a day as extreme heat put pressure on the facilities’ cooling features.
Beginning last month, fires swept through the Palisades, devastating much of the California neighborhood. While there are no known data centers in that area, a cluster of them sits just 20 miles away in Los Angeles’ financial district — a distance the fires could have reached in a few hours. The Bay Area, another data center hot spot, is also at high risk for wildfires.
The View From Security Experts
There are much cheaper ways to protect data center infrastructure that doesn’t require burying it, security experts said. Companies can distribute their data across different facilities, so if something happens to one data center, the information isn’t lost, said Murat Kantarcioglu, a computer science professor at Virginia Tech. While that does increase the chance for breaches, strong encryption practices mitigate that risk.
“It’ll get you good protection with a fraction of the cost,” he told Semafor.
Companies are also putting data centers underwater, in sealed containers on the ocean floor, said John Bekisz, vice president of Guidepost Solutions’ data center and critical infrastructure practice.
A typical, above-ground data center has extensive perimeter protections keeping bad actors out — including fences, security personnel, motion detectors, and laser technology that maps out the surrounding area and flags movement, he said. But these measures don’t necessarily protect against natural disasters and airstrikes. Putting data centers underground makes sense because it allows for them to be further isolated and with controlled entry points. But it’s still a high cost to bear, he said.
Rachyl’s view
There’s an argument that crypto has the best chance of becoming the post-apocalyptic currency, so safeguarding that framework is worth the money. Nonetheless, I’m not convinced bunkers are the necessary, multimillion-dollar answer. And while I also don’t think bunkers will be the next big land grab for the tech companies building out their AI infrastructure, there are other sectors that could benefit. Defense tech companies, governments, healthcare systems, and telecommunications providers are critical in a disaster, and the price tag that comes with the additional security may be a better trade-off.
Room for Disagreement
The demand for such facilities remains limited, and the builders who spoke with Semafor cited no completed projects. While a bunker may protect equipment from physical damage, the structure itself does not offer any additional security for one of the biggest threats facing companies today — cyber attacks. Businesses may be better off investing in increased cybersecurity measures to protect their digital infrastructure.
Notable
- The executive suite side of these planned bunker spaces are sure to look like the many luxury bunkers already out there. It’s a bit of an old story (just take a look at the date on the linked article), but it’s a fun one nonetheless — indoor pools, wine cellars, and screens that project images of the outside world. Check out some great pictures published by CBS.