No one really knows where giant squid live because no one has seen one alive in its natural habitat. Only recent research has indicated where this habitat might be. It is in the deep sea, perhaps between 200 and 1000 meters in depth, and it is possibly in association with the bottom of the sea rather than in mid-water. On the other hand, specimens that have been captured in nets sometimes come from mid-water.
Work done by Dr. Ole Brix, of the University of Bergen, indicated the blood of squids does not carry oxygen very well at higher temperatures. A squid will actually suffocate in warm water. Warm water will cause a giant squid to rise to the surface and not be able to get back down. So the giant squid are probably more likely to be found in cooler water. (Forch 1998) (Banister and Campbell 1985)