The growth of power-demanding artificial intelligence is reshaping the landscape of data centers in Europe, and Ireland, a central tech hub, may face setbacks. Data centers, which are essential for digital activities such as streaming and emailing, have become a key economic asset in Ireland, housing many major tech companies. A study by Synergy Research Group ranks Dublin as the third-largest hyperscale data center hub worldwide, and the leading one in Europe, driven by large cloud operators like Amazon, Microsoft, and Google. However, Ireland’s power grid is struggling to meet the increasing electricity demand driven by AI, which could double by 2026, potentially threatening Ireland’s position in the data center market. Seán Kelly, an Irish MEP, expressed concern over the inadequate expansion of Ireland's power grid for the digital economy. Consequently, EirGrid, the country’s electricity network operator, has been evaluating data center requests individually since November 2021, effectively halting new data centers in Dublin due to energy infrastructure limitations. They warned of a “mass exodus” of data centers if conditions don’t improve, highlighting an ongoing supply-demand imbalance since 2016. Last year, data centers consumed 21% of Ireland’s electricity, surpassing urban household use. The Commission for Regulation of Utilities warned of risks like power shortages and increased consumer costs if demand continues to outpace infrastructure development.

Kelly emphasized the necessity of maintaining electricity supply while supporting business growth, advocating for a modernized grid to achieve both goals. Ireland’s Ministry of the Environment recognized the challenge of sustainably accommodating all data center development, noting the need to align with climate legislation and energy security. As giants like Amazon, Microsoft, and Google invest in Europe's AI-driven cloud infrastructure, energy availability, particularly if cheap and renewable, will likely become a pivotal factor in future investments. Data center demand may shift from crowded markets like Dublin and Frankfurt to other regions. Not all areas will benefit equally, as hosting data centers demands substantial infrastructure and energy resources, possibly raising electricity costs for all. The McKinsey report suggests countries with ample carbon-free electricity and cooler climates could thrive. The Nordics, with their favorable temperatures, and France, with its nuclear energy, might be in advantageous positions. French President Emmanuel Macron highlighted the need for low-carbon, affordable energy, linking AI as a potential solution to these needs.