We use direct numerical simulation of the Navier-Stokes equations for a two-phase flow (water and air) to study the dynamics of the modulational instability of free surface waves and its contribution to the interaction between the ocean and atmosphere. If the steepness of the initial wave exceeds a threshold value, we observe wave-breaking events and the formation of large-scale dipole structures in the air. Because of the multiple steepening and breaking of the waves under unstable wave packets, a train of dipoles is released in the atmosphere; those dipoles propagate at a height comparable with the wavelength. The amount of energy dissipated by the breaker in water and air is considered, and contrary to expectations, we observe that the energy dissipation in air is greater than that in water. The possible consequences on the wave modeling and on the exchange of aerosols and gases between air and water are discussed.