Demand for data center capacities specifically designed for artificial intelligence (AI) increased sharply across Europe in the first three quarters of 2025. New providers of AI infrastructure, often referred to as “neoclouds,” are driving their expansion while hyperscaler activity temporarily slows down. A recent analysis by global real estate services provider CBRE shows that contracts for AI-focused colocation capacity totaled 414 MW, up from just 133 MW in the same period last year. More than half (57 percent) of the new capacity was in the Nordic countries, where low-cost and sustainable energy is often available on a larger scale than in many other countries.
The increasing demand for AI reflects a shift in the market: While hyperscaler demand temporarily declined, Neocloud providers are securing large-scale capacity to meet the growing demands of AI-driven applications. Many data center operators are therefore taking steps to manage the additional risk of renting to Neocloud companies – including higher rental prices to offset construction costs and ensure returns for AI-enabled facilities.
Andrew Jay, Head of Data Centre Solutions Europe at CBRE, explains: “Neoclouds have expanded their presence in Europe this year by taking over vacant space that was originally intended for hyperscalers. This shows that many data center providers are gaining increasing confidence in the ambitions of Neocloud providers and the associated agreements.”
Nadine Gelke, Head of Data Centre at CBRE in Germany, says:
“AI-driven demand is not only changing the size of the market, but also the investment logic. Location decisions are increasingly based on energy availability and sustainability. AI-enabled infrastructure, strategically positioned and sustainably operated, will become the foundation of the digital economy in Germany and Europe.”
The full report “European Data Centres Figures Q3 2025” is available on CBRE’s website here .
