The artificial intelligence (AI) boom has changed the face of the technology industry. As well as sparking a rush of data center construction activity, it is also determining where companies build those facilities.
Throughout their history, Europe’s data centres have clustered around major cities. After all, being close to both customers and business centres was a crucial advantage. Now, however, AI is changing those priorities.
Cheap electricity demand
Analysis from property consultancy JLL, as reported by Reuters, shows that data centers planned for 2026 to 2028 will be located an average distance of 175 kilometers from major European cities. This compares to an average of 46 kilometers for data centers built between 2022 and 2025.
The reason is simple: AI data centres need a lot of electricity, which is in short supply. Training and running AI models requires enormous amounts of computing power, which means that access to electricity must take precedence over proximity to the people using the technology.
The cost savings associated with these moves are staggering. The Reuters article stated that “powered land costs an average €2.36m ($2.75m) per megawatt of IT load in the core markets, €978,000 in cities regarded as secondary, including Copenhagen, Warsaw and Milan, and €512,000 in tertiary areas such as Bordeaux, where costs can be as low as €200,000.”
The cost
These prospective data centers will create growth opportunities for areas outside Europe’s traditional technology hubs. Developers are looking at a host of locations, from rural Spain to Northern Sweden, where land is cheaper, electricity connections more plentiful, and planning permission easier to obtain. According to Reuters, JLL says greenfield sites now account for 39% of Europe’s future data-centre pipeline, compared with just 8% of delivered projects.
There could be significant economic benefits, too. The construction of data centers can bring investment and jobs to areas that do not traditionally attract technology spending. It also creates opportunities for non-tech companies, such as energy providers and construction companies.
However, construction would not come without problems. Data centres require large amounts of both electricity and water, which could put pressure on local resources that are not equipped to support this kind of infrastructure. Developers are also likely to face resistance from local communities concerned about the environmental impact.
Business is booming
This race for cheaper land and electricity is important because of the sheer scale of investment in data centres. According to Reuters, JLL estimates that the top four hyperscale cloud providers will spend $725bn in 2026, up 77% from $410bn in 2025. Most of this investment will be in AI computing and data-centre infrastructure.
This means that, for businesses amid the AI boom, infrastructure hurdles will become increasingly high. Access to land and electricity will determine which regions attract investment and which companies can expand their AI capabilities.
Ultimately, as AI requires ever-larger facilities, the next generation of data centers may be built wherever companies can find the power to run them.
