As governments strive to develop sovereign AI capabilities to reduce reliance on foreign technology, Europe confronts a critical challenge: its data center capacities are inadequate to meet the growing demand.
Data from Synergy Research Group reveals that the US accounts for 53% of global hyperscale data center capacity, while Europe constitutes just 16%, indicating a significant unmet demand in the region.
Furthermore, according to CBRE research as of February 2024, the top ten countries with the most data centers globally are the US with 2,710, Germany with 522, the UK with 517, France with 315, the Netherlands with 300, Russia with 251, Italy with 158, Poland with 144, Spain with 143, and Switzerland with 120.
European countries eager for AI independence
European investment in data centers and capacity demand have reached record highs in recent years, signaling deferred demand from previous periods. However, industry concerns persist that European data center development plans for the next three years may not suffice to meet projected growth in capacity demand, given shortages of materials and heavy equipment.
The EU's AI Act, passed in 2024, sets a benchmark for AI regulation, promoting ethical development and innovation. Nevertheless, the EU faces stiff competition from the US and China, who have invested heavily in AI. To remain competitive, the EU must overcome these challenges and ensure its technological sovereignty.
In 2023, Germany doubled its investment in AI research to EUR1 billion (approx. US$1.11 billion) to ensure the success of its "AI Made in Germany" initiative, underscoring its commitment to becoming a global AI leader.
Simultaneously, Aleph Alpha, a German AI startup, has raised a record-breaking US$500 million. This substantial investment was propelled by the company's focus on "data sovereignty," which resonates with German businesses and the broader European market. By emphasizing control over its own data, Aleph Alpha has positioned itself as a key player in Europe's AI landscape and established a new benchmark for AI funding in the region.
An increasing number of European countries are joining the sovereign AI arms race. For instance, the Netherlands launched its own open-source large language model, GPT-NL, in early 2024, aiming to reduce dependence on private companies. French President Emmanuel Macron has consistently emphasized that "mastering AI technology is a matter of survival," urging for accelerated efforts and describing France's current investment in the AI sector as "crazy investment."
These moves align with Europe's long-standing goal of reducing reliance on US technology companies for data control, including processing and storage. They also reflect the EU's efforts to decentralize and avoid marginalization in the ongoing AI competition.
Marc Garner, senior vice president of Schneider Electric's European Critical Power Business Unit, told DIGITIMES in an interview that the so-called "Tier 1" markets, including Frankfurt, London, Amsterdam, Paris, and Dublin, have been saturated by existing hyperscalers and end-user demand.
Consequently, the industry is currently focusing on the so-called "Tier 2" markets, including Barcelona, Madrid, Marseille, Berlin, and even emerging hubs like Start Campus in Portugal.
Meanwhile, thanks to its abundant renewable energy, talent, land, and well-developed telecommunication infrastructure, Spain has emerged as a hot spot for global data center investment.
