Alphabet Inc.’s Google is planning its biggest investment in Europe, with at least €13 billion ($15.1 billion) going toward artificial intelligence infrastructure in Finland.
The investment will be made over the next two years and will include at least three new data centers, along with an expansion of Google’s existing data center in Hamina, a city in southeastern Finland, the company said Wednesday.
Google’s plans are part of a much larger expansion of computing infrastructure in Finland. About €43 billion worth of other data center projects are also being planned or are already underway in the Nordic country.
These projects are benefiting from Finland’s cold climate, which means data centers require less cooling. The heat produced by servers can also be captured and used to heat homes. About 96% of Finland’s electricity comes from carbon-free sources, mainly nuclear and renewable energy. The country also has plenty of fresh water, while most Finnish data centers use closed-loop systems that help reduce water waste.
“Google is proud to deepen our roots in Finland with the company’s largest single investment in Europe,” Chief Investment Officer Ruth Porat said in a statement.
The announcement helped boost shares of Finnish companies expected to benefit from the investment. Shares of utility company Fortum Oyj, which will sell Google half of the electricity produced by its Loviisa nuclear power plant, rose more than 11%, marking their biggest gain in almost four years.
Shares of network infrastructure company Nokia Oyj climbed as much as 6%, while telecommunications company Elisa Oyj gained 2%. Both companies will provide connectivity services for the new data centers.
The investment in Finland is part of Alphabet’s wider effort to expand its AI computing capacity. In July, the Silicon Valley company raised its capital spending forecast to as much as $205 billion for this year as it competes with other major technology companies for a leading position in artificial intelligence.
Google’s data center projects in Finland have not faced the same level of public opposition as some proposed projects in the U.S. and other parts of Europe. In those regions, concerns about land use, resources and electricity costs have delayed or stopped some projects. In the U.S., the impact of data centers on rising electricity bills is also becoming an important issue ahead of the upcoming midterm elections.
For Finland, Google’s investment is a major economic boost as the country works to recover from weak economic growth. Finland has faced weak demand, a sharp decline in trade with neighboring Russia and the effects of government spending cuts aimed at improving public finances. The country’s unemployment rate has risen above 10%, the highest in the European Union.
Google estimates that the projects will create jobs for 16,000 construction workers. The new data centers will be built in Kajaani, Muhos and Vaala in northern Finland, where Google had already acquired land. The company said the locations were chosen because they have access to existing electricity grid infrastructure.
“These locations at strong grid points both help the whole electricity system and ensure cost-effective network development,” Asta Sihvonen-Punkka, chief executive of transmission system operator Fingrid Oyj, said in the statement.
Google also said it is expanding the energy infrastructure supporting the projects. This will include new agreements for wind power and a 94-megawatt battery system at the Kajaani site to help maintain balance in the electricity grid. The new data centers will also be designed to support heat recovery.
Fortum also announced a 22-year power purchase agreement with Google covering the period of the Loviisa nuclear plant’s extended operation. Under the deal, Google will receive electricity equal to 50% of the two-reactor plant’s capacity from 2030 through 2049, Fortum said.
Other companies building, operating or planning data centers in Finland include Microsoft Corp., Nscale, AtNorth Holding AB, Pure Data Centres Group, Nebius Group NV, DayOne Data Centers and Polarnode.
With so many data center projects being planned across the country, the Finnish government is preparing a law that would require operators to register their facilities. The aim is to help authorities keep track of all the data centers operating or being developed in Finland.
