Nordic Countries

The Nordic countries are attracting significant investments in new data centers. Following Google and Facebook's entry in 2009 and 2011, the Nordic region has become a preferred site due to reliable power supply, low energy prices, political stability, faster time to market, and abundant energy and other resources compared to other European regions.

The strategic geopolitical position of the Nordic region is also attractive. Deep-sea cables connecting the US and Nordic countries and well-developed telecommunications infrastructure enhance its appeal. The colder climate helps reduce data center cooling costs. All these factors are important for data center establishment. The Nordic data center market in 2025 is expected to be $9.83 billion, with an annual growth rate (CAGR 2025-2029) of 5.78%. The Nordic Council of Ministers estimates the region could attract annual data center construction investments of EUR 2-4.3 billion by 2025, based on future global demand and the Nordic countries' strong value proposition.

The EU Code of Conduct (CoC) for Data Centers uses PUE to assess efficiency. Those demonstrating effective CoC best practices, leading to significant energy consumption reductions, are eligible for the annual EU Code of Conduct in Data Center Awards. Sweden is the only Nordic country to receive the award, recognized as a safe, green, and digitally viable location for large-scale data centers and colocation hubs.

Sweden has high-speed connections due to high-quality fiber optic cables laid nationwide. The colocation industry also plays a critical role in smooth connections, gathering data centers and telecom firms to offer secure data storage and management, and seamless Internet connectivity. The modern colocation industry is moving away from individual companies using in-house data centers toward organizations managing data through colocation clusters. Stockholm has the highest share of network traffic in the Nordic region at 55%, with 35 colocation centers operating in the capital, a capacity set to increase with global tech giants like Amazon Web Services, Microsoft, and Facebook establishing presence.

Sweden has one of Europe's lowest energy prices and is run almost entirely on fossil-free energy. As the largest producer of wind power in the Nordics, many tech giants have invested heavily in wind parks throughout the country. Stockholm is emerging as a strong green edge, even transferring energy generated from data centers to the local central heating system. To date, around 30 data centers in Stockholm feed excess heat back into the grid and are paid for it.

The global competition for AI skills is fierce. While Sweden has a strong educational system, it struggles to attract top talent due to migration regulations that force foreign graduates to leave. However, the Swedish government is reviewing these regulations to improve conditions for international talent.

The Swedish government introduced new tax legislation (Act 1994:1776) in January 2017 to stimulate data center investment. This reform included a 97% tax reduction on electricity consumed by data centers, primarily aimed at overseas businesses with an installed power of 100kW or more, allowing some providers to save up to 40% on electricity bills. The tax incentives were introduced to encourage foreign investment and apply to companies consuming data center services, including self-build operations and colocation customers. Hyperscale corporations procuring their own hardware and platform services are entitled to the full tax discount.

The Swedish government is also considering adapting existing incentives to be more broadly applicable, introducing a new concept focusing on the operational party using the data center to receive lower tax benefits. The Swedish Tax Agency implemented a change in 2019, allowing customers consuming over 100kW of electricity through IT infrastructure to claim tax relief. A new law (Bill 2024/25:131) coming into effect on July 1, 2025, requires data centers to report energy usage as part of efforts to improve energy efficiency and reduce carbon emissions, in line with the EU's Energy Efficiency Directive (EED).

Collectively, reliable and diversified energy sources, a cold climate, and advanced telecommunication infrastructure have solidified Sweden as a leading destination for data center investments in the Nordic countries.