Market research outfit Research And Markets has published its latest industry outlook and forecast for the European hyperscale data center market covering the period from 2026 to 2031.
According to the forecast, the hyperscale data center market in Europe is valued at US$ 52.02 billion as of 2025 and is projected to grow annually at a rate of 17.93 percent to reach a value of US$ 139.9 billion by 2031.
This growth is driven largely by rising AI adoption among enterprises in the finance, healthcare, government, education, retail, manufacturing, transportation, and e-commerce sectors. In order to meet this demand, operators are scaling infrastructure with GPUs, high-capacity servers, scalable storage, and high-bandwidth networking.
At the same time, demand for low latency, real-time AI and high-performance computing is pushing capacity closer to users. Growing demand for digital services, smart city programs and IoT adoption is driving the development of edge data centers across Europe.
These are the main driving factors behind the projected growth in the European hyperscaler market. However, capacity and compute aren’t the only factors driving investment.
Cooling revolution
Hyperscale data centers are packed with powerful equipment that needs to be cooled, and air-cooling isn’t sufficient for those densities. As such, several hyperscale operators are investing in liquid cooling technologies including immersion and direct-to-chip cooling. In the Nordics, however, free cooling and adiabatic cooling are seeing adoption as the ambient temperatures in the region tend to be cooler.
There has also been growing interest in district heating, where large volumes of waste heat from data centers is captured and piped into surrounding cities and homes.
“In August 2025, the Nordic data center operator, Borealis Data Center, partnered with Loiste Lämpö Oy, the Finnish public utility firm, to capture and repurpose the waste heat generated in Borealis Data Center’s data center campus in Kajaani, Finland. The company aims to supply the waste heat to nearby homes and businesses in the Kajaani region for recycling purposes,” the report reads.
Powering sustainably
Research And Markets notes that sustainability is a growing concern for operators. This comes as a number of European nations are looking to reduce carbon impact, greenhouse gas emissions. As such, operators are aligning their activities with those objectives by leaning on renewable energy. In March 2025, Telehouse, a data center firm, signed a 10-year power purchase agreement with RWE Group for wind energy to power the London Docklands data center campus.
Over the next three to five years, even more operators will adopt sustainable practices, especially renewable energy.
Where the investment is going
In terms of regional activity, ResearchAndMarkets found that European investment is concentrated in the UK, Germany, Sweden and Spain with the UK alone accounting for 20 percent of investments in the market.
Operators are also looking at Norway, Finland, Italy, Poland, and Austria as power, land and the cost of construction constrains buildouts in established hubs. However, those hubs aren’t resting on their laurels, according to the market research firm.
“France is facilitating access to grid-connected development sites, while Sweden’s Digitalisation Strategy 2025-2030 establishes priorities for national digital and AI infrastructure. The UK invested approximately US$ 283.7 million in January 2026 to launch a cyber strategy focused on digital public services and infrastructure security,” writes ResearchAndMarkets.
Furthermore, continued investment in subsea cables and terrestrial fiber is strengthening connectivity between European markets and global digital hubs.
Europe’s hyperscale market is on an unstoppable upward trajectory but simply filling halls with more servers and GPUs won’t be enough as the years wear on. Based on this analysis, the winners will be operators that work sustainably with governments while also meeting the growing demand. At the same time, emerging markets would do well to consider how operators are securing land, power, and cooling in order to make their region more attractive for buildouts.