Europe risks falling behind US, China on AI data centre build-up, Nokia CEO says

Europe lacks the infrastructure needed to build up artificial intelligence data centres and is not investing enough to keep business from moving to China and the United States, the head of Nokia said on Thursday.

While big technology companies are expected to ‌pour hundreds of ⁠billions ⁠of dollars into scaling up AI-related infrastructure this year, Europe has been lagging behind due to regulatory and energy constraints. "The issue today is Europe doesn't have the infrastructure," Nokia CEO Justin Hotard told Reuters, while praising some of the European Union's moves, such as the establishment of AI gigafactories.

"But I think when you look ⁠at the relative ‌pace of investment, I'm not sure it's enough. And it's not just about putting these factories in. You ⁠need connectivity. You need data centre capacity."


Data centres account for 3% of the EU electricity demand, but their consumption is expected to increase rapidly due to AI. Amazon said in February that long delays to get power grid connections were challenging the company's data centre expansion in Europe.

Nokia, a Finnish company once known for being the world's largest phone ‌manufacturer, is reaping gains from its push into AI. Its AI and cloud business now accounts for 8% of group sales, and the ⁠company expects that addressable market to grow by 27% annually until 2028.

"We've seen the movie before, right? If you don't build that infrastructure, then ultimately the business and the developers will move to where that is," said Hotard, who left Intel to join Nokia last year.

"The reality is right now, that's in China and in the US for the large part."