Google Invests €1 Billion in Finnish Data Center for AI Expansion

Google (GOOGL.O) announced on Monday that it will invest an additional 1 billion euros ($1.1 billion) to expand its data center campus in Finland, aimed at boosting its artificial intelligence (AI) business growth in Europe.

In recent years, many data centers have been established in Nordic countries due to the region's cooler climate, tax incentives, and abundant renewable energy sources. However, Finland's Nordic neighbors, Sweden and Norway, have become increasingly critical of hosting data centers. Some industry experts argue that these countries should prioritize using their renewable power for products like green steel, which could provide greater economic value.

Finland, meanwhile, has seen a rapid increase in wind power capacity, growing by 75% to 5,677 megawatts in 2022 alone. This growth has led to negative electricity prices on windy days, indicating an excess of renewable energy capacity available for data centers like Google's. Google secures wind power in Finland through long-term contracts.

Analysts predict a significant increase in power consumption by data centers due to the rapid expansion of AI usage. Google cited this as a key reason for its investment, along with the fact that its Hamina data center in Finland already operates with 97% carbon-free energy.

"Heat from our Finnish data center will be redirected to the district heating network in nearby Hamina, serving local households, schools, and public service buildings," Google stated. The company also reiterated its goal to achieve net zero emissions across all its operations and value chain by 2030.

In addition to its investment in Finland, Google announced last month that it would build new data centers in the Netherlands and Belgium.