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Google invests 1 billion euros in Finnish data centre to drive AI growth

FILE PHOTO: FILE PHOTO: Google's logo

HELSINKI (Reuters) - Alphabet-owned Google will invest a further 1 billion euros ($1.1 billion) into the expansion of its data centre campus in Finland to drive its artificial intelligence (AI) business growth in Europe, it said in a statement on Monday.

In recent years, many data centres have been located in the Nordic countries because of the region's cooler climate, tax breaks and abundant availability of renewable power.

Finland's Nordic neighbours Sweden and Norway have recently grown increasingly critical of hosting them, with some industry experts arguing the Nordic countries should use their renewable power for products such as green steel that could leave higher surplus value in the countries.

But Finland's wind power capacity has increased so rapidly in recent years, by 75% to 5,677 megawatts in 2022 alone, that on windy days prices have plummeted to negative, industry statistics showed.

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Therefore there is still renewable capacity available for data centres such as Google's, which acquires wind power in Finland under long term contracts.

Analysts believe data centres' power consumption is set to massively increase due to the rapid growth in AI usage, which Google, too, cited for one of the reasons behind its investment decision, alongside its Hamina data centre in Finland already operating with 97% carbon-free energy.

"Heat coming out of our Finnish data center will be re-routed to the district heating network in nearby Hamina, covering local households, schools and public service buildings," Google said in the statement. It added that it aimed to achieve net zero emissions across all of its operations and value chain by 2030.

In addition to its Finnish investment, the search and cloud giant announced last month it would build new data centres in the Netherlands and Belgium.

($1 = 0.9225 euros)

(Reporting by Anne Kauranen in Helsinki; Editing by Emelia Sithole-Matarise)