By Tatu Tuominen, Director of Public Affairs, AtNorth
Europe’s data‑centre sector faces rising geopolitical pressure, demanding pragmatic, locally grounded decisions to safeguard sovereignty and accelerate digital resilience.
Europe’s data centre sector is not immune from geopolitical storms. Energy prices, tariffs and disrupted supply chains all impact the data centre industry as much as or even more than others. Plus, the transatlantic certainties that underpinned two decades of digital infrastructure investment are being tested. As a result, an increasingly assertive debate about digital sovereignty has moved from policy documents onto the front pages. And with them has come a rush of political energy — promises of investment, declarations of independence, and a growing determination to ensure that Europe’s digital future is not determined in Washington or Silicon Valley.
In some respects, this is to be welcomed. Europe has sleepwalked into dependency and has traded leadership for convenience. Recognition that digital infrastructure is strategic infrastructure — not merely a utility to be procured at lowest cost — is long overdue. But good intentions, channelled badly, can be as harmful as complacency. The question Europe’s data centre industry must now answer is not whether to respond to geopolitical pressure, but how. In my view, that answer has four parts: respond pragmatically rather than politically; stay grounded in real, local demand; lean into the values and natural advantages that genuinely differentiate Europe; and, above all, spend wisely.
Be Pragmatic, Not Political
The word “sovereignty” is doing an enormous amount of work in European policy circles right now. It is used to justify everything from procurement rules to calls for a European hyperscaler. Some are even saying that it is “a matter of national survival, not just IT policy.” But, it is worth asking what sovereignty means in practice — and what it does not.
US hyperscalers — AWS, Google, Microsoft — are not going to disappear from the European digital landscape, nor do we want them to. They offer scale and a number of capabilities that no others can yet match. The goal should not be disengagement but choice. A European enterprise that relies on a provider subject to foreign jurisdiction (for example the US CLOUD act), has created a concentration risk that good governance should address. That is a risk management argument, not a political one.
Sovereign colocation providers represent sensible risk mitigation, alongside supporting sovereign cloud platforms built to European legal and regulatory standards. Together, they give customers genuine optionality: the ability to place sensitive or regulated workloads on infrastructure that is definitively European, while continuing to leverage global platforms where it makes sense. The industry’s job is to make that choice easy, affordable, and technically seamless — not to insist that customers make a binary decision they do not need to make.
Respond to Real Demand
Today AI is driving the conversation and investment agenda. Demand for high-density compute is exploding. These energy-intensive, thermally challenging workloads require purpose-built infrastructure and access to abundant renewable power. And, the Nordic region, where we operate, is exceptionally well-suited to serve that demand.
Investment must follow this demand and provide businesses with the compute and storage capacity they need at close proximity.
But AI is not just about training models. To deliver value it needs to be integrated into enterprise systems and work with enterprise data. The essential ‘inference’ phase must be supported in ways that meet real demand from real businesses. AI will only deliver on its potential if it drives new and effective business processes. Investment must follow this demand and provide businesses with the compute and storage capacity they need at close proximity. Here, European providers, with local operations, connections, and understanding, have a clear advantage over foreign players.
We should also not forget that not all demand is AI driven. The public cloud is just entering its second decade and there are still many workloads that remain on-premise. It is not a as sexy as AI, but ensuring European capacity for ongoing digital transformation in public and private sectors is essential. Many of these legacy workloads have not moved to the cloud specifically because they are highly sensitive, containing personal confidential data. This is real demand that presents huge opportunities to European data centre operators.
Lean into What Makes Europe Different
The persistent narrative on both sides of the Atlantic is that Europe is a digital desert and that regulation is the enemy of innovation. Neither are true. This continent has a genuinely distinctive set of strengths that, in the current environment, are more valuable than ever.
Political stability, the independence of regulators, protection of property rights, and the predictability of the legal environment remain significant advantages for European players. Regulation remains a dirty word in the USA, but here we regard good regulation as the root of trust in digital services. The GDPR has been an essential building block of digital transformation globally. Similarly, the Energy Efficiency Directive and the emerging data centre rating scheme, if well implemented, will create common, verifiable benchmarks that create transparency and a level playing field. Effective, agreed and deployed guardrails will similarly play a foundational role in accelerating AI adoption across public and private sector organisation.
Although currently out of favour in the US, sustainability remains a competitive advantage for Europe. The average carbon intensity of US data centre electricity consumption is around 384 grams of CO2e per kilowatt hour. Iceland’s grid runs on 100% renewable energy contributing on 28 grams of CO2e per kilowatt hour. For energy-intensive AI training and inference workloads, that difference is not a nice-to-have — it is a strategic imperative. Europe is not catching up on sustainability. It is ahead.
And then there are skills. The Nordic region in particular has deep engineering capability, a tradition of cross-sector collaboration between industry, academia, and government, and a workforce with genuine expertise in the operational disciplines that keep critical infrastructure running. These advantages are easily replicated and should be leveraged.
Spend Wisely
Europe’s Cloud and AI Development Act (CADA) promises significant investment in infrastructure, including so called AI megafactories capable of training the next generation of models. These are an essential part of the jigsaw, but they must not become pawns in a national competition. The specialised demands of these facilities means that some locations are far better suited than others. The Nordic region is genuinely well-suited to host these AI megafactories. The power is available, the renewable credentials are unimpeachable, the cooling economics are attractive. Several facilities of this kind are already in development or operation in the region, and it is important that decisions on future locations are based on scientific and market dynamics, not political trade-offs.
We also need to be sure that taxpayer funds invested in these next generation facilities contribute to building European strategic autonomy. As noted above, these are critical assets and need to remain under the control of European players, legal jurisdictions and regulations. There is little point in spending billions of Euros on facilities that can be shut down at the commercial or political whim of a foreign player.
Investment also needs to support both demand and capability. In all honesty, we have missed our chance to create a European Google, AWS or Microsoft, and we should not waste money trying. Instead, we should invest in skills, capacity and education that ensures the development of next generation cloud and AI services that respect and build upon Europe’s innate advantages. Capacity without capability is not a strategic asset. It is a stranded one.
Wise investment means backing local and regional providers who understand the markets they serve. It means investing in federation — the technical and commercial frameworks that allow European providers to deliver the scale and resilience of much larger platforms, without sacrificing local accountability or data governance. And it means investing in the demand side: in the organisations across the public sector, manufacturing, healthcare and financial services that need to understand how to use AI effectively.
The enterprise AI cloud — private, sovereign, European — will become the predominant home for strategic workloads. The infrastructure we build now should be ready for that moment.
Technology has seen many swings of the pendulum. We saw it with outsourcing: for a decade, every CIO’s instinct was to push as much IT as possible to external providers. Then the pendulum swung back, as organisations realised the strategic value of retaining expertise and control in-house. I expect something similar with AI. Today, the fastest path to AI deployment runs through the global public cloud. But as AI matures, and as the strategic value of proprietary data and bespoke models becomes clearer, more organisations will want their AI on infrastructure they control, under law they trust. The enterprise AI cloud — private, sovereign, European — will become the predominant home for strategic workloads. The infrastructure we build now should be ready for that moment.
Nordic Strengths, atNorth Execution
The geopolitical pressures bearing on European data centres are real, and they will not resolve quickly. But for operators with the right capabilities and the right values, they represent opportunity as much as risk.
Local data centre operators like atNorth thrive in this environment. Our facilities across Iceland, Sweden, Norway, and Denmark sit at the intersection of every advantage this analysis describes: renewable energy at scale, world-class sustainability performance, deep operational expertise, and genuine local knowledge of the markets we serve. We have demonstrated that high-density AI workloads can be run sustainably, reliably, and cost-effectively in the Nordics. We are not a distant provider offering standardised services; we are a European operator, grounded in European values, with the track record to serve Europe’s most demanding infrastructure needs.
The path through the current uncertainty is not to wait for the political weather to changer. It is to invest with clear eyes and sound judgement — leveraging the strengths Europe already has, building the capabilities it really needs, and ensuring that when the next wave of digital transformation arrives, Europe is positioned to lead it rather than catch up.
About this Series
This column is produced by atNorth, a leading Nordic data center operator. Through expert analysis and industry insight, atNorth examines the political, regulatory, economic, and technological forces shaping Europe’s digital infrastructure landscape, helping business and technology leaders navigate an increasingly complex and rapidly evolving market.
