Despite China's DeepSeek raising the prospect of more energy-efficient AI models Europe's problems with grid congestion and a shortage of suitable sites for new centres is expected to persist and, with Google and Amazon planning ‘hyperscale’ data centres, it is likely to prove impossible for capacity to come on stream fast enough to meet burgeoning demand.
Space shortages are most acute in big European data centre hubs such as Frankfurt, London, Amsterdam, Paris and Dublin so, as a result, secondary markets are booming. Cities including Milan, Warsaw and Berlin are expanding the fastest and that is expected to continue throughout the course of 2025.
According to CBRE it expects capacity coming online this year will be around 9.1 gigawatts, with hyperscalers taking up more than a third.
However, while Europe's industry is set to expand by more than 100 billion euros this year, US investment led by the 'Stargate' initiative announced by Oracle, Microsoft and OpenAI is set to see spending exceed $500 billion over the next four years.
"Europe risks falling into technological dependency, watching as AI leadership consolidates between the US and China,” warned Stijn Grove, managing director of the Dutch Data Center Association.
