In the year 2039, the drastic effects of global warming have caused sea levels to rise, resulting in major loss of land. To ensure humanity learns its lesson, a fleet of powerful warships equipped with advanced weaponry emerges, causing overwhelming defeat for naval forces throughout the world. Calling themselves the Fleet of Fog, each ship has a "Mental Model," a humanoid avatar which represents the ship's heart, its "Union Core." Each model has a different personality but all follow an unknown authority known as the Admiralty Code, who have implemented a blockade to prevent humans from traveling across the sea.

Seventeen years after the blockade, Gunzou Chihaya, a National Marine Academy alumnus, stumbles upon I-401 and its Mental Model, Iona, who sides with mankind for unknown reasons. Utilizing this newfound hope of achieving peace for humanity, Gunzou and his friends form a group of privateers, known as the Blue Steel, as they set out on a dangerous journey.