The project -- which already involves companies from China, Taiwan and AT&T's rival Verizon Communications -- was originally estimated to cost some 500 million dollars.
In the first phase, a cable stretching 17,000 kilometres (11,000 miles) from China's east coast to the western US state of Oregon is set to go into service by August, in time to transmit high-speed data from the Beijing Olympics.
The link is expected to have some 60 times the capacity of an existing one under the ocean.
The new cable is expected to help avoid breakdowns in Internet traffic similar to what occurred following a 7.1-magnitude earthquake that struck the seabed near Taiwan in December 2006, snapping undersea telecom cables.
The quake caused major communications disruptions in Taiwan, China