Data centers have reached the edge of the Arctic Circle

On the bank From the river that runs through the Swedish city of Borlange, a sprawling new data center is being built. The site formerly housed a paper mill. When developer EcoDataCenter began construction in September, its CEO, Peter Michelson Announce“The facility previously produced paper, the raw material for the newspaper information age. Now, Borlange will produce the raw material for artificial intelligence and the next information age.”

The Borlänge facility is One of more than 50 They are currently under construction or will soon be developed in the Nordic countries – the region made up of Norway, Sweden, Finland, Denmark and Iceland – as demand mounts for data centers suitable for training and running AI models. Nowhere else in Europe is data center capacity growing faster, according to research Through consulting firm CBRE.

Last year, OpenAI Announce It will deploy 100,000 GPUs in a small Norwegian fjord town in the Arctic Circle. Then Microsoft I followed suit. Just in the past few weeks, French artificial intelligence laboratory Mistral He said It will lease $1.4 billion worth of infrastructure in Borlange; Data center operator in the north Announce Plans for a massive facility elsewhere in Sweden; And another developer Project outline This would more than double Finland’s number Current capacity of the data center If completed.

The construction frenzy is due in part to a severe shortage of sites in Europe large enough and equipped with adequate power supplies to support AI workloads.

“There is an extraordinary amount of demand, but serving that demand is an increasing problem across Europe,” says Kevin Restivo, director of data center research at CBRE. “Energy is becoming an increasingly valuable commodity and is becoming scarce.” Against this background, he says, “Norway has developed specifically as a data center hub.”

Previously, data centers in Europe tended to be clustered around urban and financial centers – particularly Frankfurt, London, Amsterdam, Paris and Dublin. To support uses such as algorithmic trading, where nanoseconds count, cloud companies needed a way to transfer data with as little latency (or delay) as possible. Under these criteria, the Nordic countries were less attractive.

The picture began to change in the summer of 2023, six months after the huge success of ChatGPT. Government agencies in the Nordic countries have begun receiving calls from eager data center developers. “There has been a clear change,” says Joni Salonen, a data center specialist at Business Finland, a Finnish government agency tasked with attracting trade and investment to the country. “Now, obviously, energy – and quick access to energy – is the key criteria. They are looking for locations where they can get to market quickly.”

The growth in the Nordic data center industry has coincided with the emergence of neoclouds, a type of niche cloud company that sells access to huge fleets of GPUs. Because they serve only AI workloads, which are not dependent on latency, the new clouds have the freedom to set up data centers in remote corners of the region – even as far north as the Arctic Circle. CBRE found that new clouds account for the majority of data center capacity growth in the Nordics.

For this new type of developer, the Nordics represent a unique offering. There is plenty of land and energy available, and the region’s energy is among the cheapest in Europe. Meanwhile, abundant renewable hydroelectric and wind power, and a cool climate — which reduces the amount of energy required to cool hardware — help data center operators meet their needs. Stringent EU emissions targets.

“You don’t trade a lot by being there, but you gain a huge amount: abundant, uninterrupted green energy with little competing industrial demand for that energy,” says Philip Sachs, chief business officer at Nscale, which runs the Norwegian site, where OpenAI and Microsoft are leasing space. “When you think about trying to build very large gigafactory-style compute clusters, this is the best place to do it in Europe, if not the world.”