Dragged through the dirt

Sub-sea cable sabotage

Meta, which owns Facebook, Instagram and WhatsApp, has announced plans to build a 31,000-mile sub-sea cable across the world. Known as Project Waterworth, the cable will be longer than the Earth’s circumference and is estimated to cost $10bn.

This will make it the longest underwater cable in the world, connecting the US, India, South Africa, Brazil, and other regions, but avoiding areas of geopolitical tension – Europe, the Middle East, and China.

The aim is to extend Meta’s presence in technology beyond social media and into artificial intelligence, as well as the infrastructure that supports it. Besides being the longest cable, it will also use a 24 fibre-pair system, giving it higher capacity.

Sub-sea cables have become increasingly important to global communications, powering a variety of digital and data transfer services worldwide at speed. Some 95% of the world’s internet traffic is believed to be transferred through undersea fibre-optic cables.

However, the increasing importance of sub-sea cables to nations has increased concerns over their vulnerability to attacks or accidents. In November 2024, Germany said it suspected sabotage after two fibre-optic cables under the Baltic Sea from Germany to Finland and Sweden to Lithuania were severed. Let’s not forget either the sabotage of the Nord Stream gas pipeline at the end of 2022. Last month, the Royal Navy tracked a Russian spy vessel that was caught loitering over critical undersea infrastructure in the English Channel.

The danger doesn’t appear to be limited to Europe; twice in 2025, Taiwanese authorities have investigated Chinese-owned vessels suspected of damaging undersea internet cables. Undersea fibre-optic connectivity is viewed as a key vulnerability in Taiwan’s critical infrastructure defence against Chinese attacks. Taiwan’s government has drawn up a blacklist of 52 Chinese-owned vessels that operate under flags of convenience, to identify threats from Beijing’s “shadow fleet.”

Meta is clearly aware of security issues and has said that it will use ‘enhanced burial techniques in high-risk fault areas, such as shallow waters near the coast, to avoid damage from ship anchors and other hazards.’ However, given global geo-political tensions, further sabotage incidents involving the world’s undersea infrastructure seem likely.

What have we been watching?

Besides the jaw-dropping ‘ambush’ of President Zelensky in the Oval Office….

Trump 2.0 is proving to be even more unpredictable than Trump 1.0! A leading US investor described it as the ‘presidency of chaos’ given the flood of Executive Orders and Social Truth posts. This uncertainty is not helping US investor or consumer confidence. Last time he was in office, Trump viewed the stock market as a gauge of his political success, so will not be happy to see US equities in retreat. Elon Musk has also suffered with Tesla falling in value below $1 trillion following a slump in European EV sales -a backlash to his political stance as well as investor concerns about being side-tracked by his involvement in DOGE? Meanwhile, AI chip maker Nvidia warned that US export restrictions to China will weigh on its progress further into 2026. Crypto-currencies have been particularly volatile, with Bitcoin falling 25% from its peak before jumping 20% over the weekend, as Trump backed five coins for a US ‘Crypto-currency reserve.’

In the latest ‘Art of the Deal’ global tariff game of chicken, Trump initially delayed imposing 25% tariffs on Canada and Mexico by another month until 2nd April. However, he then reversed this decision and signed an Executive Order that will see a 25% tariff imposed on Canada and Mexico from the 4th March. Furthermore, an additional 10% tariff will be imposed on Chinese imports. Meanwhile, he has threatened to impose 25% tariffs on EU goods ’very soon’, lashing out at the bloc, saying it ‘was formed to screw the United States!’ He has also turned his tariff attention to commodities, particularly copper, saying that the ‘Great American copper industry has been decimated by global actors attacking domestic US copper production.’ Pharmaceuticals are also in the tariff firing line: ‘it’ll be 25% and higher, and it’ll go very substantially higher over the course of a year.’

US and Russian delegates met in Istanbul to bring the two countries ‘closer to overcoming the disagreements and remove irritants from their relationship.’ President Zelensky was asked to leave the White House after his clash with Trump, and the expected minerals deal was not signed between the US and Ukraine. Trump’s take on the public argument was that it would make for great TV, but the only person likely to have enjoyed watching it was Putin. Over the weekend, Sir Keir Starmer, along with President Emanuel Macron, has been trying to form a ‘coalition of the willing’ to provide a peacekeeping force in Ukraine and is aiming for a peace deal involving a one-month truce. However, everyone knows a peace will only last if the US provides a security backstop, and Trump does not show any sign of wanting to provide this. Indeed, over the weekend he threatened to entirely stop military aid to Ukraine! Imagine if Ukraine were to lose US intelligence support as well as access to Elon Musk’s satellite communication system. Why would Putin be in a hurry to agree to a peace deal given recent developments? Ukraine is rapidly using up the last of Joe Biden’s military aid package, and Russia could still overwhelm Ukrainian forces if the EU doesn’t plug the hole quickly. However, would Trump want to risk Ukraine’s valuable minerals falling into Putin’s hands? At least Trump has said that US troops will remain based in Poland – there are 10,000 currently. Meanwhile, the UK is to increase defence spending, and Germany’s new leader has proposed a €200bn defence fund to boost spending.

The situation in the Middle East remains on a knife-edge. Phase II ceasefire talks have stalled with Israel halting the flow of food in into Gaza while undertaking military operations in parts of the West Bank.

 

The UK is to increase defence spending to 2.5% by 2027, providing an additional £6bn of funding, albeit the PM initially claimed it would be £13.4bn. The extra money will be funded from the foreign aid budget. There was more bad news for Chancellor Rachel Reeves as Ofgem announced a higher-than-expected increase of 6.4% in the April energy price cap. Since this news, European gas prices have started to fall, so a glimmer of hope? However, the Deputy Governor of the Bank of England has been talking down the prospect of interest rate cuts, having become more worried about wage inflation.

 

The European Central Bank is due to meet this week, and markets expect a further 0.25% interest rate cut.

 

In the US, there was a big fall in consumer confidence with the index dropping from 102.5 to 98.3 while the expectations component fell from 82.2 to 72.9. This seems to stem from Trump/Musk DOGE uncertainties. Meanwhile, US home sales fell to their lowest level on record in January amid high prices and mortgage rates. The Bank of Atlanta lowered its US economic growth forecast for 2025, with GDP growth cut from 2.3% to 1.5%.

 

President Xi Jinping is pulling all the levers to inject growth into China’s economy. Alibaba has announced a $50bn investment in AI and cloud technology, coinciding with Jack Ma’s re-emergence in the public eye. The Chinese authorities are also reported to be looking to inject $55bn into some leading Chinese banks to re-capitalise them.

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Brent oil dipped to $73, while European gas prices also fell as the EU is planning to adopt a more flexible approach to meeting interim gas storage threshold targets this year.

Finally, some reassuring news. If you have almost finished reading this week’s Alpha Bites, then you’ll be relieved to know that a ‘shadow fleet’ vessel has not damaged one of the UK’s vital undersea fibre-optic cables by ‘accidentally’ dragging its anchor!

Read Last Week’s Alpha Bites – The making or end of NATO?

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