Google adds 1 billion euros to expand its data center in Finland, driving growth in AI business in Europe

According to the Zhitong Finance and Economics APP, Alphabet (GOOGL.US)'s subsidiary Google plans to invest an additional 1 billion euros (approximately 1.1 billion US dollars) in its data center campus in Finland to expand the campus and drive its artificial intelligence business growth in Europe.

In recent years, the Nordic countries have become popular locations for data centers due to their cool climate, favorable tax policies, and abundant renewable energy sources. However, Finland's Nordic neighbors Sweden and Norway have been critical of the construction of data centers. Some industry experts believe that Nordic countries should use renewable energy for producing green steel and other products, which would bring higher economic value to these countries.

Despite the controversy, Finland's wind power installed capacity has seen significant growth in recent years, increasing by 75% to 5,677 megawatts by 2022. This growth has led to electricity prices even dropping to negative values on windy days. Data center operators like Google have been able to leverage renewable energy, with Google already signing long-term wind power purchase agreements in Finland.

Google stated in a release that the excess heat generated by its Finnish data center will be reused and transported to the heating network near Hamina to provide heat to local homes, schools, and public service buildings.

Furthermore, Google has announced its ambitious environmental goals: aiming to achieve net-zero emissions in its operations and value chain by 2030.

It is worth mentioning that last month, the US tech giant also announced plans to establish new data centers in the Netherlands and Belgium, further expanding its business footprint in Europe.

In particular, Google announced last month an investment of 600 million euros (approximately 640 million US dollars) to build a new data center in Winschoten, Groningen Province, the Netherlands. The data center will use its waste heat to heat the future heating network in the region, and solar panels will be installed on the roof. Currently, Google has two data centers in the Netherlands, one in Eemshaven, operational since 2018, and another in Middenmeer, operational since 2020.

In addition to its expansion in the Netherlands, Google is also expanding its data centers globally. The company recently obtained a permit to establish another data center in Dallas, Oregon.

Other companies like Amazon (AMZN.US) with its AWS and Microsoft (MSFT.US) are also expanding their data center infrastructure globally. For example, AWS added over 87 nodes globally last year and expanded to new regions such as the United Arab Emirates, Switzerland, India, and Thailand. In India, AWS plans to invest 4.4 billion US dollars by 2030 as the country aims to increase its cloud computing capacity from 565 megawatts to 2.5 gigawatts.

The expansion of data centers is mainly driven by the surge in digital transformation initiatives and the use of generative artificial intelligence, as companies strive to modernize their IT infrastructure. The growing demand mostly comes from large-scale enterprises like Amazon, Microsoft, and Google, as they are at the forefront of expanding cloud computing and artificial intelligence-related services