Microsoft declares its underwater data center test was a success

Underwater pods can reduce latency by moving cloud services closer to customers.

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[Grey Bird]

With enough data centres like these, all the excess heat will go straight into the sea, further contributing to climate change. The only place these data centres wouldn’t contribute further to climate change is if they were buried deep down in earth’s crust but then cooling would be an issue.

I think I prefer the idea of city center data centres where the excess heat is put to use for central heating systems

The heat is going into the environment one way or the other anyway. Even if the heat is redirected to heating a building, the heat then goes from the building into the environment.

Also, the amount of heat the oceans absorb from these would be negligible compared to what they absorb from solar radiation every single day. You might see some minor local heating in the immediate environment, but that's not really a concern compared to the reduced energy usage (and therefore reduced CO2 emissions) needed for the cooling system.

My point about “recycling” the heat is that you don’t need to produce two units of heat (1 as a byproduct from the data center, the other for keeping buildings at liveable temperature). Byproduct heat of data center is subtracted in part from energy required to heat a building; this leading ultimately to less overall heat dumped in the atmosphere. What am I missing?

Your data center needs heat removal, and your building needs cooling during warmer months. So this doesn't work then. Also the ocean removes the heat away from the data center much more efficiently than transferring it using ducting and fans to try and heat a building. Also, if you read the article you'll see that the heat removal is only one of the problems that this solves which your idea doesn't.