The rapid advancement of Artificial Intelligence is not just impacting the tech sector, it’s reshaping industries and society. Yet the technology’s future is dependent on a critical, often overlooked enabler: the data centre. Data centres house the massive computing power, storage capacity, and lightning-fast connectivity needed for AI systems.
At a policy dinner in the European Parliament in Strasbourg, attended by a host of leading MEPs and industry figures, the critical role of data centres was examined in detail. MEPs could even don virtual reality goggles and ‘walk through’ one of Microsoft’s latest data centre projects in Copenhagen.
MEP Wouter Beke, the co-host for the event, opened by arguing that data centres should be deemed "strategic infrastructure", so critical are they to safeguarding Europe’s digital resilience and securing its economic future. From healthcare to climate modelling, these data centres are essential for Europe’s strategic autonomy and competitiveness.
Beke drew attention to commitments made by Commission President von der Leyen within the first 100 days of her second mandate, particularly her promise to ensure access to supercomputing for AI startups and industries through the ambitious AI Factories Initiative. This pledge, alongside the forthcoming Cloud and AI Development Act, aims to make high-performance computing widely available and can fuel innovation across sectors while keeping Europe’s talent and technology on home soil.
When responsibly deployed AI can be a catalyst for climate progress
At the same time, the European Data Union Strategy will enable secure and simplified data sharing across borders and industries, ensuring both competitiveness and the highest standards of privacy. This harmonised data ecosystem, accounting for almost 4% of EU GDP, will be central to Europe’s productivity and social progress.
AI and data will be crucial to helping Europe to optimise and modernise its energy systems. Strong data governance and smart incentives will be key to guiding investments in sustainable infrastructure, and managing energy efficiency across the economy.
MEP Beke was clear that the EU’s digital transition and green transition must go hand in hand. But if data centres are to support the next generation of AI without compromising the planet, they must themselves be sustainable and decarbonised. “We must ensure that the digital transition is also sustainable.” Beke insisted. “AI workloads demand immense energy, and the data centres that support them contribute significantly to Europe’s electricity consumption. As demand grows, so too does the environmental footprint.”
Nanna-Louise Linde, Microsoft’s Vice-President of European Government Affairs, reiterated the company’s commitment to decarbonising the sector, pointing out that the energy consumption of every Microsoft data centre will be covered by 100% renewable energy purchases by the end of this year.
“We’re on track to become carbon negative, water positive, zero waste and to protect more land than we use by 2030,” she said. “We’re also eliminating the use of fresh water in our cooling systems and finding innovative ways to give back, like in Finland, where waste heat from our data centres will warm up to 250,000 homes, potentially becoming the largest heat-recycling project of its kind in the world.”
Moreover, Microsoft plans to use AI itself to optimise energy use and reduce carbon emissions across sectors. “Far from being a threat to sustainability”, Linde argued, “when responsibly deployed AI can be a catalyst for climate progress”. A welcome approach for climate values, given that Microsoft has invested €19 billion in European AI infrastructure and is increasing their European data centre capacity by 40% over the next two years, resulting in over to 200 data centres across 16 countries.
Linde went on to discuss how Microsoft is committed to protecting EU tech sovereignty, and outlined the company’s ‘European resiliency guarantee’. This consists of three parts. Firstly, the creation of a governance board made up solely of European nationals, operating under EU law, to oversee Microsoft’s European data centers. This is backed-up by the legal safeguard of challenging any foreign government order, such as the US, that might stop services in Europe. Lastly, Microsoft will store a copy of its source code in Switzerland and grant EU entities the legal right to maintain services if required, ensuring smooth digital continuity.
In closing the event, co-host MEP Nicolás González Casares agreed about the important role data centres can play in combating the climate crisis, but he also went further in calling for a ‘regional fairness principle’, i.e. the areas that host carbon-free energy infrastructure should be rewarded by receiving investment, compensation, and access to new digital jobs. “Data centre deployment should be regionally balanced, creating opportunity where sacrifice is made.” he concluded.
The Spanish MEP also warned that unchecked expansion of data centres can have unintended consequences. In places like West Virginia in the US, huge date centre projects led to electricity prices rising 20–30% for nearby residents. This shocking increase would be unacceptable to the ordinary European citizen. He therefore called for the immediate ban of speculative practices where companies reserve large blocks of energy only to resell unused portions for profit, further distorting the energy market. On this point, Microsoft clarified that they have supported grid connection reforms that aim at limiting speculative practices. Furthermore, through the PPAs Microsoft concludes, it brings additional renewable energy to the market, contributing to the decarbonisation of the grid.
Equally troubling for González Casares is the competition of data centres with traditional industry. Data centres often require preferential grid access, potentially sidelining sectors like steel, automotive, or manufacturing. These are not just economic engines, they are sources of thousands of jobs. “The digital economy must complement, not cannibalise, existing industries,” he said.
To tackle this, he suggested locating data centres near renewable energy sources or aging nuclear facilities whose lifespans can be safely extended. This not only reduces transmission losses and costs but also distributes economic benefits more evenly. Grid expansion, interconnection, and smart load balancing must become priorities, paid for in part by the tech giants who stand to benefit most.
One of the guests was Romanian S&D MEP Andi Cristea, whose experience included being a former Council of Europe rapporteur on Science & Technology. He stressed the importance of industry and policy-makers working together to create a regulatory framework which supports data centres. “The biggest challenge of our time is to calibrate our institutions both at the state level and at the supranational level” he concluded.
Whether it’s ensuring Europe’s digital sovereignty, advancing climate goals, or equitable economic growth, data centres sit at the heart of the AI revolution. As the EU builds a digital future that aligns with its values, it must prioritise responsible investment, robust regulation, and a fair distribution of benefits across all member states. With visionary leadership and proper public-private partnerships, data centres can power not just AI, but a smarter, greener, and more inclusive Europe for generations.
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