mid multibillion-dollar AI infrastructure buildouts, tech firms may be seeking to spread eastward.
Several tech companies announced plans to build data centers internationally, investing billions to create AI hubs outside the US as they battle to expand their influence in the market.
On Tuesday alone, four data center projects were announced by tech firms and investors:
- Microsoft announced plans to invest $10 billion in an AI data center in Sines, a town along Portugal’s coast, in partnership with British startup Nscale.
- Google unveiled plans to invest $6.4 billion into data centers and operations in Germany over the next four years, including two data centers in Frankfurt.
- Investor group Stock Farm Road is partnering with Stanford-backed AI firm Voltai to build a $35 billion AI data center in the South Jeolla Province of South Korea, entirely designed, built and run by AI, called Project Concord.
- AI chip firm Cerebras is assisting the government of Guyana in building the region’s first data center, located in the town of Wales, as part of the firm’s program called Cerebras for Nations, aiming to help other countries adopt AI. Though the financial figures weren’t released, the data center will have a capacity of 100 megawatts.
And these projects aren’t the first time we’ve seen tech firms take an interest in setting up shop overseas. OpenAI announced plans for a one-gigawatt data center in the United Arab Emirates in May, with 200 megawatts expected to go online in 2026, and revealed plans for a 500 megawatt data center in Argentina in October. Google announced a $15 billion investment in an AI data center in India in October.
The biggest benefit of establishing a presence outside of the US might be space itself, John Boyd, Jr., Principal of The Boyd Company, told The Deep View. The intense power requirements of these facilities threaten to stress the US power grid and increase “NIMBY pressures” in US data center hubs like Northern Virginia and Washington State.
Plus, setting up AI data centers in these countries could significantly cut latency and help overcome regulatory and “data sovereignty” issues in regions that these firms see as prime for “strategic regional growth,” Trevor Morgan, chief operating officer of OpenDrives, told The Deep View.
“Depending upon where your core processing is occurring versus where your users are, it means that localization is super important,” said Morgan.