Will Finland become a data center banana republic?

Finland is seeing a rapid surge in data center construction, bringing large investments but also environmental and local concerns. The boom’s promise and risks are explored in a report by Yle.

A data center beside the paper mill

In Ummeljoki, a neighbourhood in Myllykoski, a vast construction site has replaced woodland near paper worker Kimmo Viskari’s home. Two large data centers are planned on the cleared land beside the Kymi River, and a third is being built across the river next to an old paper mill.

Viskari says the scale of the project, developed by Atnorth, is much greater than he expected. A road through the neighbourhood now carries an almost constant stream of trucks heading to the construction site. Some properties have also been purchased by the city and Atnorth.

Neighbour Mika Valtonen says he did not anticipate the size of the development, but welcomes the investment. Since the paper mill slowed down, few businesses have come to the area, he says. Valtonen works for a company that supplies construction workers and says its revenue has risen.

Atnorth received its final building permits in September, after the city of Kouvola approved every phase of the project. The city consulted around a dozen neighbours, some of whom raised concerns about noise. Atnorth says local cooperation has been good.

The investment is valued at about four billion euros. Google’s announced investment of 13 billion euros is larger, in part because Google includes chips in its figure. Chips typically account for at least half of an investment’s value, while Atnorth does not include them in its estimate.

Debate over data centers intensified after Google cleared 330 hectares of forest for a planned center in Muhos before it had a building permit. The environmental effects of the projects began receiving more attention, and data centers quickly became a political issue.

A historic investment boom

The construction surge is part of a global data center boom driven by the rapid growth of artificial intelligence. A recent Forbes article forecast that investment in artificial intelligence in the United States alone would reach nearly 2.8 trillion dollars between 2025 and 2030. Relative to the size of the economy, that would exceed investment in US railways in the late 19th century.

The United States is leading the market, followed by Europe and Asia. Finland is among Europe’s leading countries for planned data center investment. Google’s 13 billion euro investment in Muhos, Vaala and Kajaani is part of a wave of projects now under construction across Finland.

Finland’s data center boom took time to arrive. When Google began building a data center in Hamina in 2009, a wider building boom was predicted. But it took 16 years to emerge, and Sweden and Norway moved ahead of Finland in the meantime, says Antti Poikola, executive director of the Finnish Data Center Association.

Data centers first clustered around Frankfurt, London, Amsterdam, Paris and Dublin. The Nordic countries, Spain and Portugal are now among the fastest-growing locations, according to Poikola.