On the bank river flowing through the Swedish city of Borlänge, construction of a novel, extensive data center is underway. Previously, there was a paper mill in this place. When developer EcoDataCenter launched in September, its CEO Peter Michelson decided“The plant once produced paper, the raw material of the press information age. Now Borlänge will produce the raw material for artificial intelligence and the next information age.”
The Borlänge facility is one of over 50 currently under construction or soon to be developed in the Nordic countries – a region that includes Norway, Sweden, Finland, Denmark and Iceland – as demand for data centers suitable for training and running AI models increases. Nowhere else in Europe is data center capacity growing faster, he says tests by the consulting company CBRE.
Last year OpenAI announced would deploy 100,000 GPUs in a petite Norwegian town on a fjord above the Arctic Circle. Then Microsoft he followed in their footsteps. Just in the last few weeks, the French artificial intelligence laboratory Mistral he said will lease $1.4 billion worth of infrastructure in Borlänge; data center operator in North announced plans for a huge facility elsewhere in Sweden; and another developer presented the project this would be more than twice as much as in the case of Finland current capacity of the data center if completed.
The construction frenzy is partly due to an acute shortage of facilities in Europe that are gigantic enough and equipped with enough energy to handle AI workloads.
“Demand is extremely high, but meeting it is becoming an increasing challenge across Europe,” says Kevin Restivo, director of data center research at CBRE. “Power is an increasingly valuable commodity, and it is in short supply.” In this context, he says: “Norway in particular has exploded as a data center hotbed.”
Previously, data centers in Europe tended to cluster around metropolitan and financial centers, especially Frankfurt, London, Amsterdam, Paris and Dublin. To support applications such as algorithmic trading, where nanoseconds matter, cloud companies needed a way to transport data with the lowest latency (or latency) possible. Against the background of these criteria, the Nordic countries were less attractive.
The picture began to change in the summer of 2023, six months after ChatGPT’s breakthrough success. Nordic government agencies have started receiving calls from eager data center developers. “There has been a clear shift,” says Jouni Salonen, data center specialist at Business Finland, the Finnish government agency tasked with attracting trade and investment to the country. “Now power and quick access to it are clearly the main criteria. They are looking for places where they can quickly access the market.”
The growth of the Scandinavian data center industry has coincided with the emergence of neoclouds, a specialist cloud company that sells access to a huge fleet of GPUs. Because they only support AI workloads that aren’t as latency-sensitive, neoclouds are free to set up data centers in remote corners of the region – even as far north as the Arctic Circle. CBRE found that neo-clouds account for the majority of data center performance gains in the Nordic countries.
For this novel type of developer, the Nordic countries represent a unique proposition. Both land and energy are available, and electricity in the region is among the cheapest in Europe. Meanwhile, a glut of renewable hydro and wind power and a cold climate – which reduces the amount of energy needed to cold equipment – are helping data center operators cope. stringent EU emissions targets.
“By locating there, you don’t really lose much, but you gain a huge amount: lots of green, continuous energy with little competitive industrial demand for that energy,” says Phillipe Sachs, business director at neocloud company Nscale, which operates the Norwegian facility where OpenAI and Microsoft rent space. “When you’re looking at building very, very large, gigafactory-like compute clusters, this is by far the best place to do it in Europe, if not the world.”