Beside the river that traverses the Swedish municipality of Borlänge, an extensive new data facility is currently under development. This location formerly accommodated a paper mill. When EcoDataCenter, the developer, initiated building in September, its CEO, Peter Michelson, proclaimed, “This establishment once manufactured paper, the primary component of the print media era. Now, Borlänge is poised to generate the fundamental resource for artificial intelligence and the forthcoming digital epoch.”
The Borlänge site stands among over 50 such projects presently being built or slated for future development throughout the Nordic region—a geographical area comprising Norway, Sweden, Finland, Denmark, and Iceland—as the requirement intensifies for data facilities apt for nurturing and operating AI systems. No other European location is witnessing a more rapid expansion of data center capabilities, as per findings from the consultancy, CBRE.
The previous year, OpenAI revealed its intention to implement 100,000 graphics processing units (GPUs) in a small Norwegian fjord community within the Arctic Polar Zone. Subsequently, Microsoft emulated this action. Solely within recent weeks, French artificial intelligence laboratory Mistral declared its intent to rent infrastructure valued at $1.4 billion at Borlänge; atNorth, a data center provider, unveiled proposals for a colossal installation in another part of Sweden; and a separate developer detailed an initiative which, if actualized, would more than dual Finland’s existing data center capability.
This construction boom is being propelled in part by a severe scarcity of locations in Europe that are adequately sized and furnished with ample power resources to facilitate artificial intelligence operations.
“There’s an exceptional level of requirement out there, but meeting that need presents a growing challenge throughout the continent,” notes Kevin Restivo, CBRE’s director of data center research. “Electricity represents an ever more valuable resource, and it is in short supply.” In this context, he adds, “Norway, in particular, has unequivocally become a prime hub for data centers.”
Historically, European data facilities typically congregated near major urban and economic hubs—notably Frankfurt, London, Amsterdam, Paris, and Dublin. For applications such as algorithmic trading, where every nanosecond is critical, cloud providers required methods to transmit data with minimal lag (or postponement). Given these prerequisites, the Nordic nations appeared less appealing.
The situation started to transform during the summer of 2023, half a year following ChatGPT’s sudden triumph. Government bodies across the Nordics commenced receiving inquiries from keen data center constructors. “A distinct alteration was evident,” states Jouni Salonen, a data center expert at Business Finland, a state-owned Finnish entity charged with drawing commerce and capital into the nation. “Presently, electricity—and prompt availability of it—is unequivocally the primary consideration. They seek locations enabling rapid market entry.”
The expansion of the Nordic data facility sector has aligned with the rise of specialized cloud providers, known as neoclouds, which offer access to vast arrays of Graphics Processing Units (GPUs). As they cater exclusively to AI operations, which exhibit less reliance on low latency, neoclouds possess the liberty to site their data hubs in remote parts of the area—reaching even into the Arctic Circle. According to CBRE’s findings, these neoclouds constitute the predominant share of data center capacity expansion within the Nordics.
For this novel category of developer, the Nordic nations present an unparalleled offering. Ample tracts of land and energy resources are available, and electricity costs in the locale rank among the lowest continent-wide. Concurrently, the abundance of green hydropower and aeolian energy, coupled with the cool ambient temperature—which diminishes the power needed for hardware cooling—assists data center managers in fulfilling rigorous EU carbon emission objectives.
“One doesn’t significantly forfeit by situating operations there, but rather acquires an immense advantage: namely, copious, sustainable, and uninterrupted power, with minimal rival industrial demand for it,” explains Phillipe Sachs, chief business officer at Nscale, a neocloud company that manages the Norwegian location leased by OpenAI and Microsoft. “When contemplating the construction of exceptionally vast, giga-factory-scale computational clusters, it stands as by far the most optimal location within Europe, perhaps globally.”
{content}
Source: {feed_title}