Google is investing $15B in Finland to power AI data centers: Why Finland instead of US?

Alphabet Inc., the parent company of Google, has signed an agreement with Finland to buy 50% of output for 22-years from one of the two Finnish nuclear power plants. In addition, the technology giant will also invest $15.1 billion in the country for the development of artificial intelligence (AI) infrastructure over the next two years.

This marks Google's first nuclear power contract outside of the US as it searches for sites and energy for its massive data centers.

Talking to the reporters in Helsinki, Google’s Chief Investment Officer Ruth Porat said: “This is Google's first nuclear energy deal outside of the United States, and we think it's a really important cornerstone to everything that we are doing here.”

Fortum, the nuclear power plant operator in Finland, and the American technology giant have also reached an agreement to explore and develop new nuclear and renewable energy facilities in the country.

The deal involves Fortum's Loviisa nuclear power plant, located around 55 kilometres from Google's existing data centre in Hamina.

Under the agreement, Google will initially buy a smaller amount of electricity from the plant starting in 2028. This will increase to as much as 50% of its capacity between 2030 and 2049.

For Google, the deal solves one of the biggest problems facing the AI industry: electricity.

AI data centres need huge amounts of power to run thousands of chips and keep them cool. Finland offers plenty of low-carbon electricity, while its cold climate also helps bring down cooling costs.

Google has already been operating a data centre in Hamina for around 15 years, where it uses cold seawater for cooling.

The new $15.1 billion investment, its biggest in Europe so far, will be made during 2027 and 2028 and cover data centres and other infrastructure in Hamina, Kajaani, Muhos and Vaala.

Google said the projects would support around 7,000 jobs annually once operational and add an estimated $3.6 billion to Finland's economy during construction.

Fortum shares jumped around 10% following the announcement on Wednesday.