Europe Data Center Construction Market Set to Reach $28B by 2033

A new report from ResearchAndMarkets.com points to sustained growth in Europe’s data center construction market, driven by cloud adoption, AI workloads, and tightening sustainability requirements.

According to the Europe Data Center Construction Market Report 2025–2033, the market is projected to grow from $16.32 billion in 2024 to $27.87 billion by 2033, representing a 6.1% CAGR. Demand is being fueled by enterprises migrating workloads to cloud environments, rising AI and IoT deployments, and increasing need for secure, scalable infrastructure.

Established hubs such as Germany and France continue to attract investment due to strong connectivity and regulatory clarity, while secondary markets are gaining traction as grid constraints and permitting delays push developers beyond traditional locations.

This trend aligns with recent developments highlighted by TheMarketAI, including SWI Group’s UK data center expansion to support Europe’s AI and cloud surge and Nebius’s bet on sustainability-first AI infrastructure. Both point to the same structural shift identified in the ResearchAndMarkets report: Europe’s data center growth is increasingly shaped by energy efficiency, sovereign infrastructure concerns, and long-term operating resilience rather than raw scale alone.

Sustainability has become a defining feature of new projects. European regulators are enforcing stricter carbon-reduction policies, prompting operators to adopt renewable energy sourcing, advanced cooling systems, and modular construction techniques. The Nordics in particular are emerging as preferred locations due to access to wind and hydropower.

The report highlights accelerating investment momentum. Hyperscale operators announced over €50 billion in new European investments during 2024, while an €720 million asset-backed securitization underscored growing institutional confidence in data center real estate. Labor shortages are also shaping construction strategies, with modular designs reducing deployment timelines to as little as six months.

Recent projects reflect the scale of ambition across the region. Brookfield Asset Management announced a SEK 95 billion expansion of AI capacity in Sweden, while Vantage Data Centers completed a major securitization tied to German facilities. Meanwhile, Siemens, SAP, and Deutsche Telekom are exploring a self-governing AI campus in Germany.

Despite the growth outlook, challenges remain. High capital expenditure, elevated energy prices, and regulatory complexity continue to pressure margins, particularly for smaller operators navigating GDPR, environmental rules, and extended permitting processes.

TheMarketAI Take

Europe’s data center push is not just about cloud adoption. It’s about AI readiness, energy politics, and infrastructure realism. Europe is already feeling it falling behind in tech compared to the US (see Draghi report).

The data center race is accelerating — but in Europe, it’s being run within much tighter boundaries.