Excerpt from Encyclopedia Galactica, 42nd edition:

Squid (-s) [n]

"The Squids, as they are commonly referred to among humans, are water-living lifeforms that have spread all over the galaxy in spite of their total inability to breathe in any normal atmosphere. They live exclusively underwater, and are at a first glance quite similar to the octopii of Earth, but possess an intelligence that might be unmatched in the known parts of the galaxy. There is no way to be certain, however, as all tests that have been administered have given such ridiculous numbers that they have been discounted.

The Squids are normally quite peaceful, and tend to live in harmony with their environment wherever they settle (and this is mostly on planets with plenty of water, no Squid settlements are known on planets with less than 60% ocean. It is believed that any ratio smaller than that makes them uneasy in their new, watery home). They have the capacity to develop fearsome weapons, however, mainly by means of biological nanobots (microscopic machines, in this case commonly referred to as "germs") which they seem to control telepathically. The Squids have nine "arms", four of which have eyes and one for reproduction, extending from under the bulbous, torpedo shaped head, which has a thick carapace to protect the internal organs. When threatened they can quickly retract most of themselves into this and are then invulnerable to anything up to small slug throwers (equivalent to a 9mm pistol by Earth standards). They are also quite resistent to various chemicals, since their "bio-nano" can quickly adapt and produce antidotes and various protective layers.

The Squids are perhaps mostly noted for their ship building. Their underwater docks and construction methods are a closely guarded secret, even though they will quite happily modify and build ships for other species if the price is right. A Squid ship is not just a mass of engines and thick bulkheads, however, it is a living organism, or possibly colony of organisms, which constantly grows and dies, so that the entire living mass has been replaced after about fifty earth years. It is not known if these ships are sentient, but if so it is probably a very specialized, low level intelligence, mainly concerned with keeping itself in one piece and taking care of the daily chores of keeping the ship and its inhabitants well. Looking at one, it appears to be made of some kind of dull grey metal, and feels much like it as well, but it is highly flexible, and capable of literally growing wings and doors in mid flight. The ships that are used by humans also have advanced audiovisual capacities, as well as connectors that can interface with the commonly worn Neural Net. This also allows any human so equipped to control the ship with her mind."