Pure DC Building Finland AI Data Center, Secures Microsoft Deal

Oaktree Capital Management-backed UK firm Pure Data Centres is building a data center in Finland that clients including Microsoft Corp. are slated to use, part of a broader effort to ramp up the digital infrastructure necessary for Europe to build and run more artificial intelligent systems.

Pure DC is embarking on the first €1.5 billion ($1.7 billion) phase of the project involving the construction of 110 megawatts, according to the company. That’s enough power to energize roughly 82,500 households at any given moment. Microsoft is set to be among the customers of the planned project, people familiar with the matter said, asking not to be identified discussing confidential information.

Pure DC declined to name customers of the project, saying only that it’s fully leased. Microsoft said it doesn’t comment on contracts with specific facilities, adding that the company’s “portfolio includes infrastructure operated under a variety of ownership and commercial arrangements around the world.”

The site will be capable of expanding to more than 550 megawatts, representing as much as €7.5 billion in investments, Pure DC interim chief executive officer Gary Wojtaszek said in an interview.

Pure DC is among the companies positioning themselves to benefit from Europe’s desire to catch up to the US and China on artificial intelligence and lessen the region’s dependence on technology firms abroad. Microsoft, Amazon.com Inc. and Google owner Alphabet Inc. are meanwhile among the major American tech giants looking to capture more business in Europe.

The Finnish data center marks Pure DC’s first major foray into building a campus that’s capable of running complex AI workloads for large enterprises. Wojtaszek has been shifting the company’s focus to bigger assets in more remote locations, an effort to diversify the company’s portfolio beyond smaller, more centrally located sites that are primarily designed for general cloud services.

Read more: Oaktree’s Data Center Firm Wants to Triple Capacity With AI Boom

Building massive AI campuses in more remote areas comes with its own challenges. “There is so much political blowback against data centers now,” Wojtaszek said. His team has been working with local authorities in Finland for two years to get the necessary land, energy and financing for the campus there.

Pure DC is currently developing data centers in London, Madrid and Dublin. It announced a joint venture for a data center in Paris with real estate firm Segro last week, even as it becomes harder to build in large cities, Wojtaszek said, adding that he plans to expand into the Nordics and Iberia, too.

While the project in Finland is fully financed, Wojtaszek said, the firm is looking for sponsors for future growth. Pure DC has been tapping the Nordic bond market with a bond expected to price next week, Wojtaszek said, calling it “a way to diversify funding.” After that, he said he also plans to make use of the European bond market and will eventually seek global sponsors.

Owner Oaktree was meanwhile seeking new minority investors for the data center firm, looking to raise at least £800 million, Bloomberg reported last year.