EU Cloud and AI development act must enable value creation for Europe
Europe’s ability to remain secure, competitive, and prosperous in a shifting geopolitical environment depends on advancing technological and data sovereignty and reducing critical dependencies on non-European hyperscalers. Europe must take decisive action to boost its own capabilities and solutions, including its compute infrastructures and data centres – central themes in the forthcoming Cloud and AI Development Act.
Investing in infrastructure alone is not enough. What is essential is to create the conditions for European companies to develop services and software that can scale and grow into real alternatives. Another critical aspect is how to create demand for European cloud services. The European cloud and AI infrastructure must strategically support this, along with measures such as governance and policies, to create a level playing field and a functioning European single market. Well-managed data is the key raw material for value creation through infrastructures, software and services, and this must be recognised as a strategic asset, essential also for strengthening Europe’s technological sovereignty — playing a key role in enhancing industrial competitiveness, driving innovation, and ensuring security. Europe’s pressing challenge and must-win battle is to ensure that value from European data is created for Europe, fully leveraging Europe’s own data assets – ensuring their European ownership and security, and that the value they generate benefits first and foremost European businesses, researchers and institutions, laying the grounds for European companies to grow in creating digital solutions and services, to boost flourishing European data economy markets.
The European cloud development should be seen as a part of a wider ecosystem that should be developed coherently, building on existing work and initiatives. Efforts in federating existing data infrastructures, such as the European Open Science Cloud (EOSC), the common European data spaces, the Open Web Search initiative, and the upcoming AI Factory Data Labs, should be scaled up hand in hand with investments in AI and cloud capabilities, to reap the benefits of data. The Open Web Search – i.e. an open European web index, should be turned into a permanent function that directs data for European use, creating an impact that has already been identified in a market potential study, in which the market potential of a European open web index is anticipated to reach up to 4,5bn€ within ten years.
Ultimately, the success of Europe’s AI ambitions relies on people – their skills, creativity, and understanding of AI. Strategic investments in EU-level initiatives like the AI Skills Academies and joint study programmes in AI and data are essential. At the same time, it is critical to create understanding about technology as a horizontal skillset that is needed in all domains. To build a solid competence base across the society, the possibilities, risks, applications and implications of technology in different fields of research, business and governance need to be considered. All AI related initiatives should be in line with the Union of Skills Strategy to ensure an integrated approach to competence development. Building a solid competence development system will not only foster the creation of a competitive data economy, but also position Europe as a destination for global talent. State-of-the-art infrastructures such as the AI Factories must be systematically used as means for developing skills, accumulating competences and attract and retain talent.
CSC wholeheartedly agrees with the importance of ensuring that compute infrastructures and data centres operate in a way that is as environmentally and societally sustainable as possible. It is of key significance to support research and innovation that aims to further mitigate the ecological footprint of these operations. One way is to leverage the cooler climate of Europe’s northern regions. These locations are well-suited for data centres, as the cooler climate reduces the need for energy-intensive cooling systems and water evaporation, making operations more sustainable. In this regard, the geographical concentration of data centres that is identified as a problem in the Call for Evidence could, in fact, be a part of the solution and a prime example of regional smart specialization in Europe. Leveraging natural conditions in certain regions could help the European compute and data ecosystem grow and operate more sustainably, and help to make European data economy more cost-efficient, which is more important than ever in current economically tight times.
The EU’s sustainability rating scheme for data centres is a crucial mechanism for driving environmental improvements in the sector, and should be further developed and utilised. The current scheme addresses the sustainability of the operational phase of a data centre to a sufficient degree, considering e.g. the use of renewables and energy reuse. However, for the rating scheme to be truly impactful, it must address the sustainability of the whole lifecycle of a data centre, giving preference to brownfield solutions in the construction phase and incentivising reuse and recycling at the decommissioning phase. Without this holistic approach, critical emissions and resource use are overlooked, undermining the credibility and impact of the sustainability efforts.
Rather than pursuing as many data centres as possible across the continent, Europe should adopt a more strategic approach to expanding its data centre capacity. This involves not only smart specialisation but also a careful assessment of which types of data centres deliver actual economic and societal value to Europe, reinforce European data ownership, and mitigate risks of vendor lock-in.
Qualitative metrics are needed to better understand the manifold impacts of data centres and to drive a more strategic approach. Clear preference should be given to data centres that are owned and operated by European actors who are committed to a comprehensive set of sustainability, technological, and strategic criteria. These operators should commit to using renewable energy, reusing waste heat, and enhancing energy efficiency and circular economy in their data centres. They should also play an active role in supporting the stability and resilience of the local electricity grid. Operators that want to give something back to the society and to the region where they are hosted, should be preferred, through tangible social and environmental corporate responsibility criteria. Close cooperation with local stakeholders is essential to ensure that data centre operations contribute meaningfully to regional growth, competitiveness, wellbeing and security, and that their negative impact on the region is minimised. Operators should thrive to contribute to broader societal return on investment, and the purpose of the data centre operations should be assessed with criteria of not only how well it succeeds in minimizing its negative effects but also how it maximises its positive effects, such as e.g. creation of employment and new talent, advancing R&D activities and providing tools for addressing grand challenges such as the climate change. Only operators that fulfill the strategic criteria for making an excellent return on investment for Europe, should be eligible for the incentives that the EU and Member States use to attract data centre investments. Effective incentives may include e.g. tax breaks, especially when it comes to electricity taxation that remains a considerable part of data centre operation costs.
Read more
Irina Kupiainen
Irina Kupiainen is responsible for CSC’s Public Affairs.