It sounds like a reasonable effort when the cooling effect of the ocean will save energy. Where I lost interest was their expecting to power it with wave energy. If they have a backup, wave energy would be OK. If they don’t, it’s foolish.
Also, having something a mile offshore connected by cable makes it susceptible to sabotage for sure. Fill a drum full of explosives with a time delay and sink it.
I have to give Microsoft credit for this kind of innovation. Cooling is a big issue for data centers.