Google to invest US15 billion in AI Infrastructure in Finland

Google’s move is part of a large-scale build-out of computing capacity in the Nordic country, coming on top of an estimated 43 billion euros worth of projects being planned or executed. Photo by TOBIAS SCHWARZ/AFP via Getty Images

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The investments over the next two years will include the construction of at least three new data centres as well as the expansion of its existing data centre in the southeastern city of Hamina, the company said in a statement on Wednesday.

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Google’s move is part of a large-scale build-out of computing capacity in the Nordic country, coming on top of an estimated 43 billion euros worth of projects being planned or executed.

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Those projects are taking advantage of Finland’s relatively cold climate, which requires little cooling and where heat generated by the servers can be captured to warm up homes. In addition, 96 per cent of electricity in the Nordic country is based on carbon-free production, mostly a mix of nuclear and renewable power. There’s also plenty of available fresh water, and most data centres in Finland are built with a closed loop system reducing water waste.

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“Google is proud to deepen our roots in Finland with the company’s largest single investment in Europe,” chief investment officer Ruth Porat said in a statement.

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The announcement buoyed local companies that will benefit from the project. Shares in utility Fortum Oyj, which will sell Google half the output of its Loviisa nuclear power plant, rose more than 11 per cent, the most in almost four years.

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Network infrastructure provider Nokia Oyj rose as much as six per cent and telecommunications operator Elisa Oyj was up two per cent. The companies will enable connectivity for the new data centres.

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The Finnish investment is part of Alphabet’s efforts to accelerate an expansion of AI computing capacity. The Silicon Valley giant in July raised its capital spending forecast to as much as US$205 billion this year in a race with rivals to dominate the AI landscape.

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The projects in Finland haven’t inspired as intense a public backlash as some of the proposed sites in the United States or other parts of Europe, where concerns over land and resource use and power costs have delayed or derailed projects. In the U.S., data centres’ contribution to higher electricity bills is becoming a key issue in upcoming midterm elections.

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For Finland, the investment is a major boost as it struggles to revive economic growth. The Nordic country has struggled with weak demand, the collapse of trade with neighbouring Russia and the effects of fiscal tightening aimed at bringing public finances under control. The unemployment rate has topped 10 per cent, the highest level in the European Union.

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Google estimates that the projects will employ 16,000 construction workers. The new data centres will be built in Kajaani, Muhos and Vaala in northern part of the country where the company had previously acquired land. The sites were selected to take advantage of existing grid infrastructure, Google said.