The Borlange facility is one of more than 50 that are currently under construction or will soon be developed in the Nordics – the region made up of Norway, Sweden, Finland, Denmark and Iceland – as demand grows for data centers suitable for training and running AI models. Elsewhere in Europe, data center capacity is not growing so fast, according to research from consulting firm CBRE.
Last year, OpenAI announced that it would deploy 100,000 GPUs in a small Norwegian fjord town in the Arctic Circle. Then Microsoft also followed suit. In just the past few weeks, French AI lab Mistral said it would lease $1.4 billion worth of infrastructure at Borlange; Data center operator AtNorth announced plans for a massive facility elsewhere in Sweden; And another developer outlined a project that would more than double Finland’s current data center capacity when completed.
The building frenzy is being fueled in part by Europe’s acute shortage of sites that are large enough and equipped with sufficient energy supplies to support AI workloads.
“There is an extraordinary amount of demand there, but meeting that demand is becoming an issue across Europe,” says Kevin Restivo, director of data center research at CBRE. “Electricity is an increasingly precious commodity, and there is a shortage of it.” Against that backdrop, he says, “Norway in particular has exploded as a data center hub.”
Previously, data centers in Europe clustered around metropolitan and financial centers—particularly 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. Contrary to those criteria, the Nordic countries were less attractive.
The picture began to change in the summer of 2023, six months after the runaway success of ChatGPT. Nordic government agencies started calling from eager data center developers. “There has been a clear shift,” says Jouni Salonen, a data center expert at Business Finland, the Finnish government agency that is tasked with attracting business and investment to the country. “Now, electricity – and quick access to electricity – is clearly the main criteria. They are looking for sites where they can get quick access to market.”
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 that don’t depend on latency, neoclouds are free to set up data centers in far-flung corners of the region – even north of the Arctic Circle. CBRE found that neoclouds accounted for the majority of data center capacity growth in the Nordics.
For this new type of developer, the Nordic countries represent a unique proposition. There is both land and energy available in abundance, and electricity in the region is among the cheapest in Europe. Meanwhile, the abundance of renewable hydropower and wind power, and the cool climate – which reduces the amount of energy needed to cool hardware – helps data center operators meet stringent EU emissions targets.
“You’re not really trading much by going there, but you’re getting a huge amount of benefit: abundant green embodied electricity with less competing industrial demand for that electricity,” says Philip Sachs, chief business officer at neocloud firm Enscale, which operates the Norway site where OpenAI and Microsoft lease space. “When you’re thinking about trying to build very, very large, giga-factory-style compute clusters, this is the best place to do it in Europe, if not the world.”
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