Europe Is Threatened To Be Left Behind In The AI Race! Lack Of Data Centers Is A Big Problem By 2025

JAKARTA Data center capacity in Europe will grow by 22% this year, but remain struggling to meet growing demand. This increases Europe's risk of falling behind in the artificial intelligence race (AI), industry analysts said at a conference on Wednesday.

Last week, Chinese company DeepSek surprised the market by introducing an AI model that was more energy efficient. However, this does not necessarily address the main problems in Europe, namely power grid bottlenecks and land constraints for the construction of new data centers.

Big software companies like Google and Amazon are continuing their plans to build a large-scale data center (hyperscale), while companies in Europe also need more space related to AI.

"A service providers cannot build data centers quickly enough to meet demand," Kevin Restivo, director of data center research at CBRE, said in his keynote address at the Kickstart Europe conference.

The most severe spatial shortages occurred in major European data centers, namely Frankfurt, London, Amsterdam, Paris, and Dublin, where the limited capacity of the power grid hampered expansion.

As a result, the secondary market in Europe is growing rapidly. Milan, Warsaw, and Berlin are predicted to be the fastest-growing cities by 2025, while companies are starting to search locations outside major cities.

CBRE estimates the capacity of the data center to operate this year as measured by the amount of electricity required to reach around 9.1 gigawatts, with hyperscalers taking more than a third of those capacities.

According to CBRE, the average cost of building a "colocation" space or space leased to large companies in European data centers is 12 million euros per megawatt.

This shows that the European data center industry is growing more than 100 billion euros this year, but is still far behind major investments in the United States. For example, the "Stargate" initiatives of Oracle, Microsoft, and OpenAI are planning to invest $500 billion in the next four years.

"Europe is at risk of falling into technology dependence, while AI leadership is increasingly consolidated between the US and China," said Stijn Grove, Director of the Dutch Data Center Association.