European data centers will increase capacity by 22% this year, but they will still struggle to meet growing demand, posing risks to Europe’s AI race.

China’s DeepSeek has raised the prospect of more energy-efficient AI models.

However, this doesn’t address Europe’s challenges of grid congestion and site shortages.

Secondary markets like Milan, Warsaw, and Berlin are expanding rapidly, but European investment still lags behind the US, which is investing US$500 billion in AI infrastructure.