The rapid expansion of artificial intelligence and cloud computing is driving an unprecedented surge in data center construction across Europe.
As companies increasingly rely on AI-powered solutions and cloud-based infrastructure to optimize operations, the demand for data center capacity has skyrocketed. This surge in demand is accompanied by a growing need for the energy required to support these facilities, reflecting the resource-intensive nature of AI-driven computing.
According to research from CBRE Group, the European market is set to witness record-breaking data center expansion in 2025, with an estimated 937 megawatts (MW) of power demand expected to come online. This marks a substantial increase of 282MW, or 43 percent, from the 655MW capacity delivered in 2024. The accelerated growth underscores the critical role AI and cloud computing play in modern business strategies, pushing companies to expand their digital infrastructure to meet rising computational needs.
The construction boom is fueled by multiple factors, including the availability of power and suitable land, government incentives, and the ambitions of hyperscale cloud providers. Markets such as Milan are emerging as key locations for data center expansion, while established hubs like London and Frankfurt continue to lead the way in development.
Over 57 percent of the new capacity is expected to be concentrated in Europe’s largest data center markets, including Frankfurt, London, Amsterdam, Paris, and Dublin. These cities remain at the forefront of AI-driven technological advancements, housing major cloud service providers and enterprises that rely on high-performance computing.
Despite rapid expansion, data center providers face significant challenges in securing sufficient power and land for new facilities. The increasing energy consumption of AI and cloud computing applications has placed pressure on electricity grids, making power availability a crucial consideration for data center expansion. Even with these challenges, customer demand for capacity remains strong, signaling confidence in the long-term adoption of AI technologies.
The growth of AI-related infrastructure is not limited to major data center hubs. Secondary European markets are also experiencing rapid development, with CBRE predicting double-digit supply growth in five out of the ten secondary markets it tracks.
Cities such as Milan and Madrid are emerging as significant data center locations, with seven secondary markets expected to surpass 100MW of capacity by the end of 2025, compared to just four at the end of 2022. This expansion highlights the broader geographical distribution of AI and cloud-driven growth, as companies seek to establish infrastructure in more diverse locations to optimize performance and meet regulatory requirements.
The increasing reliance on AI-powered applications, including machine learning, large-scale data processing, and cloud-based enterprise solutions, is a primary driver behind the rising demand for data centers. As businesses continue to integrate AI into their operations, the need for high-performance computing capabilities will only grow. This trend is reshaping the European digital landscape, pushing investment into data center expansion at an unprecedented rate. With AI and cloud computing becoming central to business innovation, the data center boom is set to continue, solidifying Europe’s position as a key hub for digital transformation.
InfotechLead.com News Desk
