Save StorySave this storySave StorySave this story<\/p>\n
On the bank of the river that runs through the Swedish town of Borl\u00e4nge, construction is underway on a sprawling new data center. The site previously housed a paper mill. When the developer, EcoDataCenter, broke ground in September, its CEO Peter Michelson declared, \u201cThe facility once produced paper, the raw material of the newspaper information age. Now, Borl\u00e4nge will produce the raw material for AI and the next information age.\u201d<\/p>\n
The Borl\u00e4nge facility is one of more than 50 currently under construction or soon to be developed across the Nordics\u2014the region made up of Norway, Sweden, Finland, Denmark, and Iceland\u2014as demand escalates for data centers suitable for training and running AI models. Nowhere else in Europe is data center capacity growing faster, according to research by consulting firm CBRE.<\/p>\n
Last year, OpenAI announced it would deploy 100,000 GPUs in a tiny Norwegian fjord town in the Arctic Circle. Then Microsoft followed suit. In the last few weeks alone, French AI lab Mistral said it would lease $1.4 billion worth of infrastructure at Borl\u00e4nge; data center operator atNorth announced plans for an enormous facility elsewhere in Sweden; and another developer outlined a project that would more than double Finland\u2019s current data center capacity if completed.<\/p>\n
The building frenzy is being spurred in part by an acute shortage of sites in Europe that are large enough and equipped with sufficient energy supply to support AI workloads.<\/p>\n
\u201cThere\u2019s an extraordinary amount of demand out there, but servicing that demand is increasingly an issue across Europe,\u201d says Kevin Restivo, director of data center research at CBRE. \u201cPower is an increasingly precious commodity, and there\u2019s a scarcity of it.\u201d Against that backdrop, he says, \u201cNorway specifically has absolutely exploded as a data center hotbed.\u201d<\/p>\n
Previously, data centers in Europe tended to cluster around metropolitan and financial centers\u2014particularly Frankfurt, London, Amsterdam, Paris, and Dublin. To support uses like algorithmic trading, where nanoseconds count, cloud companies needed a way to transport data with as little latency (or delay) as possible. Against those criteria, the Nordic countries were less attractive.<\/p>\n
The picture began to shift in summer of 2023, six months after the breakout success of ChatGPT. Nordic government agencies began to field calls from eager data center developers. \u201cThere was a clear change,\u201d says Jouni Salonen, a data center specialist at Business Finland, a Finnish government agency tasked with attracting trade and investment to the country. \u201cNow, power\u2014and quick access to power\u2014is clearly the main criteria. They are looking for sites where they can get access to the market quickly.\u201d<\/p>\n
The growth in the Nordic data center industry has coincided with the emergence of neoclouds, a type of specialist cloud company that sells access to huge fleets of GPUs. Because they serve only AI workloads, which are not as latency-dependent, neoclouds are free to establish data centers in far-flung corners of the region\u2014even as far north as the Arctic Circle. Neoclouds account for the majority of the data center capacity growth in Nordics, CBRE found.<\/p>\n
To this new type of developer, the Nordic countries represent a unique proposition. There is both plenty of available land and energy, and power in the region is among the cheapest in Europe. Meanwhile, the glut of renewable hydropower and wind energy, and the cool climate\u2014which reduces the amount of energy required to cool hardware\u2014helps data center operators meet stringent EU emissions targets.<\/p>\n
\u201cYou\u2019re not really trading away much by locating there, but you\u2019re gaining an enormous amount: abundant green contiguous power with little competing industrial demand for that power,\u201d says Phillipe Sachs, chief business officer at neocloud firm Nscale, which operates the Norway site where OpenAI and Microsoft lease space. \u201cWhen you\u2019re thinking about trying to build very, very large, giga-factory-style compute clusters, it\u2019s far and away the best place to do it in Europe, if not the world.\u201d<\/p>\n
The demand among data center operators is propelling a surge in land prices even in remote areas of the Nordics, where heritage industries like mining, lumber, and paper have dried up. \u201cIt differs from case to case, but the value of forest land soon to be zoned for data center use is currently 4 to 9 times higher than normal forest land in the region,\u201d says Salonen. The hope is that the arrival of AI data centers might revive those fading rural economies. \u201cThe municipalities are very anxious for investment,\u201d says Salonen.<\/p>\n
The vision of a flawless symbiosis\u2014whereby the Nordics provide an ideal home to a breed of power-hungry but not latency-dependent AI data centers, which in turn reinvigorate rural economies\u2014hinges on the proposed facilities actually coming to fruition.<\/p>\n
Some hyperscale data center operators, Restivo asserts, are hoarding suitable sites in anticipation of future need, without an immediate intention to develop there. \u201cThey don\u2019t need all the power they have contracted today, but they think they\u2019ll need it,\u201d he claims. \u201cAnd they certainly want to keep it away from competitors.\u201d<\/p>\n
For now, though, as the available space in Western Europe continues to dwindle, plans for new data centers in the Nordics continue to be announced almost weekly. Elsewhere, the scarcity of energy is \u201cfar and away the biggest constraining factor,\u201d says Andrew Jay, head of data center solutions EMEA at CBRE. \u201cIt\u2019s driving pretty much everything.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
Save StorySave this storySave StorySave this story On the bank of the river that runs through the Swedish town of Borl\u00e4nge, construction is underway on a sprawling new data center. The site previously housed a paper mill. When the developer, EcoDataCenter, broke ground in September, its CEO Peter Michelson declared, \u201cThe facility once produced paper, […]<\/p>\n","protected":false},"author":1,"featured_media":46653,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[],"class_list":{"0":"post-46652","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business"},"_links":{"self":[{"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/posts\/46652","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/comments?post=46652"}],"version-history":[{"count":0,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/posts\/46652\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/media\/46653"}],"wp:attachment":[{"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/media?parent=46652"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/categories?post=46652"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/tags?post=46652"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}