UAE, Italy firms to build 500MW AI data center

Khazna Data Centers and Italian energy company Eni have signed a joint venture agreement to build a 500-megawatt AI-focused data center in Ferrera Erbognone, Lombardy.

The project is part of a broader partnership between Italy and the United Arab Emirates, announced in February 2025, aiming to develop up to 1 gigawatt of IT capacity in Italy.

The data center will focus on high-performance computing and energy-efficient infrastructure.

It will be powered by low-carbon electricity from a new high-efficiency gas power plant designed to capture CO2 emissions.

Development activities for the campus are already underway to support Europe’s growing digital and AI infrastructure needs.

🔗 Source: Eni

🧠 Food for thought

1️⃣ A capacity milestone for Italy’s rapidly growing data center market

At 500 MW, the Khazna-Eni AI Data Center Campus represents an unprecedented scale for Italy’s data center market, potentially transforming the country’s digital infrastructure landscape.

For perspective, DATA4’s entire Milan campus, currently one of Italy’s largest, has a total power capacity of 270 MW across 18 data centers spanning 28 hectares 1.

This single project would nearly double Milan’s current data center capacity, where approximately 40 existing data centers account for nearly half of Italy’s total energy capacity 2.

The investment comes at a pivotal moment, as Italy’s data center sector is projected to receive up to €15 billion in investments between 2025 and 2026, with Italy gaining traction as an emerging market due to cost and space advantages compared to traditional hubs 3, 2.

This capacity expansion positions Italy to potentially compete with the established “FLAP-D” markets (Frankfurt, London, Amsterdam, Paris, Dublin) that have traditionally dominated European data infrastructure.

2️⃣ Addressing the energy paradox of AI infrastructure

The Khazna-Eni partnership tackles one of the most pressing challenges of AI infrastructure expansion: its massive energy requirements and potential environmental impact.

AI workloads are projected to drive a 160% increase in data center power demands across Europe by 2030, creating significant sustainability concerns 4.