GEORGE ASHWIN THE AI-LED OVERHAUL
THE AI-LED OVERHAUL OF DATA CENTRE FACILITIES HOW ALTERNATIVE OPTICAL SOLUTIONS SUPPORT Across Europe, the current data centre landscape is enabling growth not only for the major players, but also for smaller enterprise entities. The capacity of facilities and IT installations continues to expand exponentially, primarily because of new legislation and sustained investments in both established businesses and Artificial Intelligence (AI) start-ups alike.
T his momentum is placing increasing pressure on operators, who are already trying to overcome a number of other pain points: for example, data centres remain significant energy consumers, and rising energy prices and limited grid capacities can hinder operators in the race to implement optimal network infrastructure. As economies become increasingly digitalised, and we continue to see a desire for greater data sovereignty across the continent, these challenges will only grow harder to deal with. CHANGES IN LEGISLATION A number of initiatives have been launched in recent years to establish Europe as a word-class hub where AI is concerned. In February 2025, the European Union (EU) launched the InvestAI project, which will mobilise approximately €200 billion into AI, including a specific €20 billion for AI gigafactory sites across the continent. Recognising that optimal infrastructure is essential for open, collaborative development of AI models – and to make Europe an AI powerhouse – the strategy’s end goal is to implement AI successfully across key industries such as healthcare, telecoms and more. Meanwhile, the European Commission’s AI Continent Action Plan, launched in April 2025, includes the proposal of a Cloud and AI Development Act to triple the EU’s data centre capacity by 2032. This
followed the announcement of seven new AI factories at the end of 2024, located in Spain, Italy, Finland, Germany, Luxembourg, Greece and Sweden. These developments will help house close to 100,000 AI chips – four times more than the current capacity of AI factories today – with the additional aim of bolstering the amount of supercomputers found within the region. There are also a number of country- specific AI initiatives too. Announced for the first time in January 2025, the UK Government has launched its own AI Opportunities Action Plan to enhance the lives of its citizens and public services through AI. It details plans to encourage greater investment from AI firms to create growth zones within the country, which will be used to deliver new infrastructure needed for tomorrow’s demands. One such zone is already under development in Culham, Oxfordshire, with more on the horizon. The plans are also set to enhance public compute capacity by 2000% by developing a brand- new supercomputer, as well as the development of an AI Energy Council to fully grasp the demands and challenges expected to be placed on resources as a result of these developments. In April 2025, the German Coalition Agreement was also drafted to maintain the country’s position as Europe’s leading data centre hub. Several cities in Germany – including Frankfurt – are considered key markets for data centre
developments and are seeing major investment and expansion in this area. This agreement aims to bolster these growing markets, while encouraging greater AI-specific investment across the country. THE CHALLENGES TO OVERCOME However, there remains several hurdles when it comes to building the necessary infrastructure for AI powered data centres. One key issue remains the power requirements and overheads of these facilities. AI requires significant computational power to work effectively, which will drive up energy demands across the board. At the same time, such powerful servers and components will need state-of-the-art cooling systems that can manage the heat generated within the data centre, which also contributes to greater consumption, and more demand on current energy sources. In Germany, natural gas accounts for near 33% of its final energy consumption, which is a vulnerability considering the country faces some of the highest electricity prices in Europe in what remains a volatile period in the sector. While energy sources are becoming increasingly diversified, this is still a point of concern for operators within the region, especially when factoring the sheer amount of power required for data centre infrastructure. The electricity consumption of German data centres alone is expected to rise to 80 TWh by 2045, an almost 400%
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| ISSUE 42 | Q3 2025
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