The US sanctions on Chilean officials over a submarine cable to Hong Kong reveal the hidden battleground that will define the 21st-century digital order
Executive Summary
- The US sanctioned three Chilean government officials on February 20 for supporting a submarine cable project linking Valparaíso to Hong Kong, marking the first time Washington has punished a democratic ally over undersea telecommunications infrastructure.
- Submarine cables carry 95–99% of all intercontinental data traffic, making them the most critical—and most vulnerable—chokepoint in the global digital economy. Control of these cables is emerging as a strategic priority rivaling nuclear deterrence and semiconductor supply chains.
- A "Great Bypass" is underway: US-backed projects like Bifrost and Echo are rerouting Pacific data flows around China, while Beijing is deploying its own parallel network through HMN Technologies (formerly Huawei Marine). The result is the physical infrastructure of a bifurcated internet—a splinternet built not in code, but in glass and steel on the ocean floor.
Chapter 1: The Chile Flashpoint
On February 20, 2026, Secretary of State Marco Rubio announced visa restrictions on three Chilean government officials—Transport Minister Juan Carlos Muñoz, Telecommunications Undersecretary Claudio Araya, and Subtel Chief of Staff Guillermo Petersen—for "knowingly directing, authorizing, funding, providing significant support to, and/or carrying out activities that compromised critical telecommunications infrastructure and undermined regional security."
The offense? Supporting a private-sector submarine cable project that would directly connect Chile's coast to Hong Kong.
The move was extraordinary for several reasons. Chile is a US treaty ally, a founding member of the Organization of American States, and one of Latin America's most stable democracies. The sanctioned officials were not accused of corruption, drug trafficking, or human rights violations—the usual grounds for such measures. They were punished for allowing a telecommunications project that Washington deemed a national security threat.
President Gabriel Boric, with fewer than three weeks left in office before right-wing successor José Antonio Kast takes power on March 11, rejected the sanctions categorically. "Chile is a country that is proud of its sovereignty and profoundly respectful of national and international law," he wrote on social media. "We don't accept anyone dictating what we can or can't do beyond the law."
The timing was not coincidental. US Ambassador Brandon Judd had raised the cable issue with Chile's Defense Minister just days earlier, warning about "the risks we see in redundant Chinese submarine cables." The US position was clear: Chile already has the Humboldt cable—a US-backed project routing through Australia and New Zealand—and any direct link to China is unacceptable.
Chapter 2: The Invisible Infrastructure That Runs the World
To understand why Washington would risk a diplomatic rupture with a close ally over a cable project, one must first understand what submarine cables actually are—and why they matter more than almost any other physical infrastructure on Earth.
The global submarine cable network consists of more than 1.4 million kilometers of fiber-optic lines crisscrossing the ocean floor. These cables, each roughly the diameter of a garden hose, carry between 95% and 99% of all intercontinental data traffic. Every financial transaction, every military order, every diplomatic communication that crosses an ocean travels through these glass threads.
The numbers are staggering. The SWIFT banking network alone moves roughly $10 trillion in transactions daily through submarine cables. Cloud computing, streaming services, AI model training, remote warfare—all depend on this infrastructure. Satellites, by comparison, handle less than 5% of international bandwidth and are orders of magnitude slower and more expensive.
Yet this critical infrastructure is remarkably fragile. The cables rest on the seabed, often unarmored in deep water, vulnerable to ship anchors, fishing trawlers, earthquakes, and—increasingly—deliberate sabotage. In 2023 and 2024, a series of mysterious cable cuts in the Baltic Sea, later attributed to ships linked to Russia's shadow fleet, demonstrated how easily this infrastructure could be disrupted. In November 2024, the Chinese-flagged bulk carrier Yi Peng 3 was accused of severing two Baltic cables in what Nordic intelligence agencies called a deliberate act.
| Metric | Value |
|---|---|
| Global submarine cable length | 1.4 million km |
| Share of intercontinental data | 95–99% |
| Number of active cable systems | ~550 |
| Daily financial flows (SWIFT) | ~$10 trillion |
| Average repair time after cut | 5–14 days |
| Cost of a new transpacific cable | $300M–$600M |
The asymmetry between the cables' importance and their vulnerability has made them a priority for military strategists. NATO established a Maritime Centre for the Security of Critical Undersea Infrastructure in 2023. The US Navy has developed specialized cable protection capabilities. And intelligence agencies have long used submarine cables for surveillance—Edward Snowden's 2013 revelations exposed the NSA's TEMPORA program, which tapped cables landing in the UK to intercept massive volumes of global communications.
Chapter 3: The Great Bypass—How the US Is Rerouting the Internet
The Chile sanctions are not an isolated incident. They are part of a systematic US campaign to reshape the physical architecture of the global internet—a campaign that has accelerated dramatically since 2020.
The strategy has two prongs: block Chinese companies from building or operating submarine cables, and fund alternative routes that bypass Chinese territory entirely.
The blocking campaign. In 2020, the US blocked the Pacific Light Cable Network, a planned Google-Facebook cable between Los Angeles and Hong Kong, citing national security concerns about its partial Chinese ownership. The cable was rerouted to the Philippines and Taiwan. Since then, Washington has pressured allies across the Pacific and Indian Oceans to exclude HMN Technologies—the Chinese cable company formerly known as Huawei Marine Networks—from new projects. HMN Tech had been the world's fourth-largest cable builder, responsible for roughly 15% of all new cable installations. By 2025, its share of new Western-aligned cable projects had fallen to near zero.
The bypass strategy. US tech giants have responded by building cables that deliberately avoid Chinese waters and landing points. Google's Bifrost cable, operational since late 2025, connects the US West Coast to Southeast Asia via a route that bypasses the South China Sea entirely. Meta's Echo cable follows a similar path. These "Great Bypass" projects have fundamentally altered the Pacific's digital topography—creating redundant pathways that reduce dependence on any single chokepoint, especially those near Chinese territorial waters.
The result is visible on the ocean floor: two parallel cable networks are emerging. One serves the US-aligned world, routed through Japan, Taiwan, the Philippines, Singapore, Indonesia, and Australia. The other serves China and its partners, built by HMN Tech and landing in countries from Pakistan to Djibouti to Brazil.
Chapter 4: China's Counter-Network
Beijing has not been passive. China's response to the US cable containment strategy has been to build its own global network—a "Digital Silk Road" beneath the waves.
HMN Technologies, despite being effectively locked out of Western-aligned projects, has continued to win contracts across Africa, Southeast Asia, South America, and the Middle East. The company has laid or is constructing cables connecting:
- Pakistan to East Africa (PEACE cable, operational)
- China to France via Egypt (SEA-ME-WE 6, with Chinese-built segments)
- Brazil to Cameroon (SAIL cable, completed 2024)
- Southeast Asia internal networks (multiple projects)
The Chile-Hong Kong Express cable that triggered the US sanctions represents an expansion of this network into South America's Pacific coast—territory Washington considers firmly within its sphere of influence. For the US, allowing a direct Chinese cable to Chile would not only provide Beijing with potential surveillance capabilities but would also establish a Chinese data hub in a region where the US has maintained near-total telecommunications dominance.
China's cable ambitions are intertwined with its broader Digital Silk Road initiative. The Belt and Road Initiative's digital component has invested in terrestrial fiber networks, data centers, and smart city projects across 80+ countries. Submarine cables are the backbone connecting these investments, creating an alternative digital ecosystem that does not depend on US-controlled infrastructure.
The strategic implications are profound. In a severe crisis—a conflict over Taiwan, for example—the US could theoretically instruct cable operators to cut or degrade Chinese connections to the global internet. But if China has its own parallel network, this leverage diminishes significantly. The submarine cable war is, at its core, about maintaining or undermining digital coercive capability.
Chapter 5: Scenario Analysis
Scenario A: Digital Iron Curtain (45%)
The bifurcation accelerates. The US formalizes a "Trusted Cable" initiative—similar to the Clean Network program for 5G—requiring allies to exclude Chinese cable companies and route traffic through approved pathways. China responds by completing its own global network, creating two largely separate internet backbones. Countries are forced to choose which network to connect to, or pay the cost of dual connections.
Rationale for probability: This scenario follows the established trajectory. The US has already blocked multiple Chinese cable projects. The Chile sanctions demonstrate willingness to punish even allies. The Pax Silica technology alliance (announced February 20) explicitly aims to create trusted supply chains that exclude China. Historical precedent: the COCOM export controls during the Cold War created a similar bifurcation in technology trade, lasting four decades.
Trigger conditions: Additional sanctions on HMN Tech customers; formal US "Trusted Cable" certification program; Chinese cable sabotage incident (real or alleged) that galvanizes Western action.
Scenario B: Managed Coexistence (35%)
Economic pragmatism prevails. While the US and China build parallel networks in contested regions, most countries—especially in the Global South—maintain connections to both. A de facto dual-backbone system emerges, but without formal exclusion. International cable governance frameworks develop through bodies like the ITU, establishing rules of the road for submarine cable security.
Rationale: Pure bifurcation is expensive and commercially irrational. The internet's value comes from its universality. Companies like Google, Meta, and Amazon have enormous commercial interests in maintaining connectivity with China-linked markets. The Humboldt cable itself was originally designed to connect Chile directly to Asia before US pressure rerouted it—suggesting even Washington sometimes compromises.
Trigger conditions: Corporate lobbying against rigid cable policies; developing nations resisting forced choices; successful US-China diplomatic channels on cyber issues.
Scenario C: Cable Warfare (20%)
A kinetic or hybrid conflict triggers deliberate cable cutting. This could range from Russian sabotage of NATO cables (as already suspected in the Baltic) to Chinese severing of cables near Taiwan in a crisis, to US or allied action against Chinese cables during a major confrontation. The vulnerability of submarine cables transforms from a theoretical risk to an active weapon.
Rationale: The Baltic cable incidents of 2023–2024 demonstrated that state actors are already testing cable sabotage as a grey-zone weapon. NATO's establishment of cable protection missions acknowledges this risk. In a Taiwan scenario, cutting cables would be among the first actions—Taiwan receives 90%+ of its international bandwidth through submarine cables. Historical precedent: Britain's cable-cutting campaign against Germany in WWI was devastatingly effective.
Trigger conditions: Escalation in Taiwan Strait; Russian hybrid warfare expansion; discovery of surveillance devices on cables.
Chapter 6: Investment Implications
The submarine cable war has direct implications across multiple sectors:
Cable manufacturers and operators. SubCom (US), Alcatel Submarine Networks/Nokia (Finland/France), and NEC (Japan) benefit from Western rerouting. Companies like Xtera and Ciena (optical equipment) see increased demand. The global submarine cable market is projected to reach $30 billion annually by 2028, up from $15 billion in 2023.
Big Tech. Google, Meta, Amazon, and Microsoft are now the largest investors in new submarine cables, collectively spending $10–15 billion annually. This spending is increasingly driven by AI data center connectivity requirements. Investors should monitor capex guidance for cable-related infrastructure.
Satellite competitors. SpaceX's Starlink and Amazon's Kuiper benefit from submarine cable vulnerability anxiety—LEO satellite constellations offer redundancy, particularly for military and government users. However, satellites cannot match cable capacity and remain a complement, not a substitute.
Cybersecurity. Cable monitoring, threat detection, and network resilience create new market opportunities. Companies providing cable landing station security and deep-sea surveillance may see government contracts increase.
Political risk. Countries that host critical cable landing stations—Singapore, Djibouti, Egypt, Indonesia—gain leverage but also face pressure from both sides. Investors in these markets should factor submarine cable geopolitics into country risk assessments.
Conclusion
The sanctions on three Chilean officials over a fiber optic cable may seem like a minor diplomatic spat. It is not. It is a signal that the United States is prepared to weaponize the physical infrastructure of the internet—the actual glass fibers on the ocean floor—as a tool of great power competition.
The submarine cable network is the least visible and most important infrastructure in the modern world. For decades, it was treated as a neutral utility—like roads or postal services. That era is ending. As the Chile incident demonstrates, every new cable is now a geopolitical act. Every route is a strategic choice. Every landing station is a potential intelligence asset or vulnerability.
The iron curtain of the 21st century will not be built of concrete and barbed wire. It will be laid in the darkness of the deep ocean, one fiber optic strand at a time. And like the original, it may take decades to dismantle.
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