The Great Rebalancing: The Connectivity Chokepoint — Deutsche Bank Research

This report examines how subsea cables and communications satellites have become critical chokepoints of geopolitical and commercial rivalry in the era of AI. Driven by soaring bandwidth demands, US hyperscalers and sovereign states are aggressively securing physical connectivity infrastructure across the seabed and low-Earth orbit.

Key Takeaways

• 1.Subsea cables remain the irreplaceable physical backbone of the internet, carrying over 99% of intercontinental data and transmitting ~$10trn in daily financial transactions across ~500 active cables.
• 2.Hyperscalers (Google, Meta, Microsoft, Amazon) are reshaping global network topology by vertically integrating into subsea cables and satellite constellations, accounting for nearly 75% of global bandwidth demand.
• 3.Low Earth Orbit (LEO) satellite constellations, spearheaded by Starlink (which operates 54% of all active satellites in orbit), represent the next frontier in defense, resilient connectivity, and space-based AI computing.

Table of Contents

• 1. How connectivity works
• 1.1 What is the Internet?
• 1.2 How data physically travels
• 1.3 How the Internet transitioned from a public good to a private advantage
• 1.4 Why a decentralized system still creates concentration
• 2. Undersea cables: The invisible backbone of the internet
• 2.1 How undersea cables work
• 2.2 Why undersea cables are strategic
• 2.3 Undersea cable vulnerabilities
• 2.4 State actors responding
• 3. Satellites: Beyond terrestrial networks
• 3.1 How satellites support connectivity
• 3.2 Why satellites are strategic: the arrival Starlink
• 3.3 Satellite vulnerabilities
• 3.4 How state actors are responding
• 4. The new power map of connectivity
• 4.1 The rise of private control
• 4.2 Effects of the AI disruption
• 5. Conclusion

Report data

Figure 1: Notable chokepoints in the connectivity corridor

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