Finance
Europe Risks Falling Behind Us, China on AI Data Centre Build-Up, Nokia CEO Says
Published by Global Banking & Finance Review®
Posted on April 23, 2026
2 min readLast updated: April 23, 2026
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Nokia CEO Justin Hotard warns that Europe’s infrastructure—especially grid capacity and data centre build‑out—is lagging behind the U.S. and China, risking investor and business migration despite EU efforts like AI gigafactories.
Europe at Risk of Falling Behind on AI Data Centre Development, Nokia Warns
Europe’s AI Data Centre Infrastructure and Investment Challenges
By Gianluca Lo Nostro and Agnieszka Olenska
Current State of AI Data Centre Infrastructure in Europe
April 23 (Reuters) - 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.
Industry Perspectives and EU Initiatives
"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."
Energy Demand and Expansion Barriers
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’s Position in the AI and Cloud Market
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.
Risks of Insufficient Infrastructure Investment
"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 U.S. for the large part."
(Reporting by Agnieszka Olenska and Gianluca Lo Nostro; Editing by Milla Nissi-Prussak)
Key Takeaways
- •Europe’s data centre power demand is projected to triple from ~10 GW today to ~35 GW by 2030, straining its energy infrastructure (weforum.org).
- •Grid connection delays of up to seven years are hampering data centre expansion—for example, AWS faces multi‑year delays in Europe (itpro.com).
- •Global spending on AI-related data centre infrastructure could reach $7 trillion by 2030, a scale Europe must match but currently trails due to regulatory, energy and connectivity constraints (mckinsey.com).
References
Frequently Asked Questions about Europe risks falling behind US, China on AI data centre build-up, Nokia CEO says
1Why does Nokia's CEO believe Europe is lagging in AI data centre development?
Nokia's CEO cites lack of infrastructure and slower investment as key reasons Europe is falling behind the US and China in AI data centre build-up.
2What challenges are impacting AI data centre expansion in Europe?
Regulatory constraints, energy limitations, and delays in power grid connections are significant hurdles for expanding AI data centres in Europe.
3How important is data centre infrastructure for AI growth?
Robust data centre infrastructure is critical, as it supports business and developer needs; without it, European business may move to US or China.
4What percentage of EU electricity demand do data centres account for?
Data centres currently use about 3% of EU electricity demand, with rapid increases expected due to AI-related needs.
5How is Nokia shifting its business focus regarding AI?
Nokia's AI and cloud segment now make up 8% of group sales, with expectations of annual market growth of 27% until 2028.
