AI infrastructure has been under the spotlight a lot in Europe lately, with a focus on countries across the region building up their own domestic hardware stack under the banner of tech sovereignty.
VCs have also taken note, with AI hardware and compute startups in Europe raising €1.9bn in funding this year already, almost the same amount as the €2bn raised in the whole of 2025, according to Sifted data.
Companies leading this surge include London-based AI infrastructure company Nscale which, earlier this year raised a $2bn Series C and landed a $14.6bn valuation in the process. Dutch neocloud Nebius also closed a $4.3bn funding round around the same time.
Sifted sat down with Ben Tickler of Innovation Economy U.K. and Kim Larsson Nyheim of Innovation Economy Nordics at J.P. Morgan to unpack the push for European infrastructure sovereignty, and why the Nordics are offering Europe an advantage.
The push for sovereignty
Europe’s cloud services are currently controlled by three US hyperscalers — Amazon Web Services (AWS), Microsoft Azure and Google Cloud — which together own 70% of the European market.
But compute power, and where it comes from, is slowly being considered a critical utility much like a nation’s energy grid, according to Larsson Nyheim.
Stakeholders from many sectors across Europe, especially heavily regulated industries such as government, finance and healthcare, have realised they can’t afford to be entirely dependent on foreign infrastructure.
If a geopolitical event restricts access to US-based data centres, a region without its own AI infrastructure could see its economy stall, says Larsson Nyheim.
“For governments and regulated sectors, owning and controlling the entire AI stack is essential for future national security and economic resilience," he adds.
There’s been a significant push in the UK and Europe to fund homegrown startups that are designing chips and working on developing data centres.
There has been an increase in UK companies raising funding with the objective of challenging US giants such as Nvidia.
The UK government recently announced a £1.1bn plan to boost the country’s ability to build and scale AI infrastructure. It will set aside £750m for a new AI supercomputer, £400m of which will go towards buying semiconductors and inference chips needed to run AI models.
Earlier this month, the European Commission also unveiled its Tech Sovereignty Package, a set of proposals to reduce the continents over reliance on foreign technology providers.
The proposals include increasing Europe’s AI cloud capabilities and domestic data centre capacity, as well as a new sovereignty framework intended to help public sector organisations assess the extent to which a cloud provider is “sovereign.”
"There has been an increase in UK companies raising funding with the objective of challenging US giants such as Nvidia,” Tickler says. “Fractile’s $220m raise in May is one example. The priority currently is to build chips domestically and strengthen end-to-end supply chain ownership.
The government’s AI Growth Zones also reflects a broader push to expand domestic infrastructure,” he adds. “Developing national supply chains across Europe is essential, rather than relying on international providers.”
The Nordic advantage
Capital has steadily been flowing into Nordic AI infrastructure, says Larsson Nyheim, with the region offering unique advantages for companies looking to reduce their carbon footprint while building data centres and infrastructure.
There's a lot happening here in the Nordics. It offers a trifecta of efficiency, sustainability and state stability.
Examples of Nordic neoclouds — companies building data centres — include Sweden’s Evroc, which is working on sites in Sweden and France, and Finland’s Verda, which is focused on providing early-stage startups with cheap and flexible compute.
There are also notable examples of non-local companies utilising the region. Google recently began building its first self-developed data centre in Sweden's Horndal; in March Nebius announced the construction of a new AI factory in the Finnish city of Lappeenranta.
“There's a lot happening here in the Nordics. It offers a trifecta of efficiency, sustainability and state stability,” says Larsson Nyheim.
The climate angle is a big focus. High-density AI servers generate massive amounts of heat, and the colder climate of the Nordics reduces the energy and costs required to cool these facilities.
Power also determines compute supply and the region offers renewable energy for many companies trying to reach their climate goals.
A region without its own AI infrastructure could see its economy stall.
In 2025, OpenAI also announced the launch of data centre initiative, Stargate Norway, with the entire facility powered by renewable energy.
Meanwhile Meta has been operating in Sweden for 15 years, with its first infrastructure project launching there in 2011.
“It's not just about chasing the AI company anymore, it's about solving the bottlenecks where power and energy decides the access and supply chain," Larsson Nyheim says.
“We’re seeing this shift to scaling infrastructure in Europe,” adds Tickler. “We’re seeing a number of companies leading this effort, such as Nscale, and that's been because of the growing demand for sovereignty.
“There’s still strong investment going into application AI, but we’re seeing infrastructure build out in Europe growing rapidly.”
