Due to Rising Seas, most of the land is lost, fleets of sentient warships mysteriously appear and devastate the world's navies. The Blue Steel submarine defects to the human side to help fight back.
Kongou obliterates the ships of the American Fleet of Fog and Iona, along the other mental models, make contact with Kongou in an attempt to bring her to her senses. However, Kongou claims that it's her duty to prevent further anomalies to the Fog by destroying Iona and all ships who come in contact with her, including herself, before locking down all communications. After barely deflecting an attack of Kongou's enhanced Super Gravity Cannon, the I-401 conceals itself, knowing that confronting her directly is useless, when Iona decides to reach Kongou and confront her face to face. Gunz? agrees with her plan and after evading a massive barrage of attacks, Iona boards a torpedo to reach Kongou's deck. Iona attempts to reason with Kongou who keeps attacking her until she finally traps Iona and prepares to self destruct herself to kill both, when the sequence is disrupted by I-401's Super Gravity Cannon. In the end, Iona suceeds to dissuade Kongou and prevents the destruction of both. The reformed Kongou befriends Iona while the superstructure created by her collapses. Days later, as the I-401's crew delivers the vibration warhead to the U.S. Navy as intended, Takao's body is restored and they return to the sea, hoping that their actions have helped change the world for the better.
In the near future, mankind was driven away from the seas and landmasses were isolated from each other with the advent of the "Fleet of Fog", AI controlled ships which destroyed all opposition turning the world into turmoil. Years later, the Japanese Government is about to launch an unmanned cargo shuttle into orbit when the Fleet of Fog ship Nagara appears to prevent it. The launch is a success when the human-crewed Fog submarine I-401 defeats the enemy by request of the government. After the battle, the I-401's captain Gunz? Chihaya reminisce with its mental model, a human-shaped avatar called Iona about their first meeting two years ago. It was during this time that I-401 was under human custody for years, but unresponsive until Gunz? comes in contact with it, awakening Iona. After Iona reveals that she had instructions to serve under him, Gunz? agrees to join forces with her, and they flee together. Back to the present, Gunz? is approached by Ry?jir? Kamikage, the Assistant Secretary of Military Affairs, who reveal that the shuttle was destroyed before accomplishing its task, which is to deliver the plans of a new weapon developed to fight the ships of the Fog to the United States, as Japan now lacks the resources needed to mass produce it. Accepting the task of crossing the Pacific Ocean to take the plans to the US by themselves, Gunz? and his crew depart to resupply at the Yokosuka Base, but the Fog's Heavy Cruiser Takao takes heed of the I-401's approach and prepares itself to engage it.
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