Construction is underway on a large new data center in Borlänge, Sweden, on the site of a former paper mill along the river that runs through the town. The developer, EcoDataCenter, broke ground in September. Its CEO, Peter Michelson, framed the transition directly: “The facility once produced paper, the raw material of the newspaper information age. Now, Borlänge will produce the raw material for AI and the next information age.”
Borlänge is one of more than 50 data centers currently under construction or in development across the Nordic region, which spans Norway, Sweden, Finland, Denmark, and Iceland. No other part of Europe is expanding data center capacity faster, according to research by consulting firm CBRE.
A Rush of Major Commitments
The scale of recent activity is striking. OpenAI announced plans to deploy 100,000 GPUs in a Norwegian fjord town inside the Arctic Circle. Microsoft followed with its own commitment at the same site. In recent weeks, French AI lab Mistral said it would lease $1.4 billion worth of infrastructure at Borlänge, while data center operator atNorth announced plans for a large facility elsewhere in Sweden. A separate project, if completed, would more than double Finland’s current data center capacity.
The driving force is a shortage of suitable sites across Europe. Land large enough to support AI workloads, paired with reliable and sufficient energy supply, is hard to find. “There’s an extraordinary amount of demand out there, but servicing that demand is increasingly an issue across Europe,” said Kevin Restivo, director of data center research at CBRE. “Power is an increasingly precious commodity, and there’s a scarcity of it.”
Why the Nordics
Europe’s legacy data center hubs sit around major financial centers: Frankfurt, London, Amsterdam, Paris, and Dublin. Those locations served use cases like algorithmic trading, where low latency matters enormously. The Nordic countries, far from those centers, were historically less competitive on that measure.
That calculus shifted sharply in mid-2023, roughly six months after ChatGPT broke into mainstream use. Nordic government agencies started receiving a wave of calls from data center developers. Jouni Salonen, a data center specialist at Business Finland, a Finnish government agency focused on attracting trade and investment, described the change plainly: “Now, power — and quick access to power — is clearly the main criteria.”
The region offers land, cheap energy, and abundant renewable sources including hydropower and wind. The cold climate also reduces cooling costs, helping operators meet EU emissions requirements. Philippe Sachs, chief business officer at neocloud firm Nscale, which operates the Norwegian site leased by OpenAI and Microsoft, put it bluntly: “You’re not really trading away much by locating there, but you’re gaining an enormous amount: abundant green contiguous power with little competing industrial demand for that power.”
Neoclouds Lead the Expansion
Much of the growth is being driven by a new category of company called neoclouds. These are specialist cloud providers that sell access to large fleets of GPUs and serve AI workloads exclusively. Because AI training is far less latency-sensitive than financial applications, neoclouds can operate in remote locations without meaningful performance penalties. CBRE found that neoclouds account for the majority of data center capacity growth across the Nordics.
The economic ripple effects are reaching even the most remote corners of the region. Land values in areas previously dominated by mining, lumber, and paper industries have surged. According to Salonen, forest land being rezoned for data center use is currently selling for 4 to 9 times the value of ordinary forest land in the region.
Photo by Barnabas Davoti on Unsplash
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