Stop buffering – what's Finland's plan for data centers?

Dataaminen = idling; for example, passively sitting in front of a screen – an expression that the youth of the early 2010s surely remembers.

Now, "dataaminen" has made a comeback – not in the context of teenagers’ screen time, but at the heart of public administration. The rush to establish data centers in Finland has caused many policymakers to stall. And for good reason: this is a complex issue. Technology, energy, security, environment, taxation, and international relations are intertwined in ways that make every decision strategic – or every indecision strategic.

Finland has established itself as a desirable location for data centers. Google's facility in Hamina is fully operational, Microsoft is building a massive complex in Järvenpää, Equinix is strengthening its presence in Helsinki, and most recently, TikTok's parent company ByteDance is planning a billion-euro project in Kouvola. These investments can significantly influence regional development, innovation ecosystems, and the enhancement of expertise. However, they also raise critical questions that cannot and should not be ignored.

Physically in Finland, legally elsewhere?

Even if a data center is physically located in Finland, data governance may be subject to another country's legal system – in ByteDance’s case, China, where legislation may require companies to share data with the state. This is not merely a question of technology or infrastructure, but of data governance and national sovereignty.

The ByteDance case is not merely a zoning issue: in April 2024, the European Union fined the company €345 million for violating children's data protection laws. The planned data center in Kouvola involves Chinese investors and a billionaire from Dubai. This example highlights a broader concern – that even a data center located in Finland does not guarantee that data-related decisions are made within the Finnish or European legal framework. It raises the question of where the boundary of digital sovereignty lies.

Energy Balance Under Scrutiny

On the other hand, the benefits of data centers are undeniable. They can serve as platforms for the development of new technologies, such as AI solutions, and enable climate-neutral energy innovations. Microsoft’s plan to use waste heat from its center for district heating is an example of how data infrastructure can support the energy transition.

However, we must also acknowledge that data centers consume enormous amounts of electricity – often more than medium-sized cities. This consumption arises primarily because servers run 24/7, generate a lot of heat, and require constant cooling. Backup systems, peak loads, and computationally heavy applications like AI further increase the demand. Fingrid has already stated that the current electricity grid capacity is insufficient without substantial investment. This is not a mere technicality – it is a strategic question directly tied to national preparedness. The environmental impact goes beyond just the origin of electricity – which cannot be offset simply by renewable energy. Construction materials, land use, cooling systems, and failure to utilize waste heat all contribute to harmful environmental effects. Telia’s data center in Helsinki already provides carbon-neutral district heating to thousands of households – proving that solutions exist when they are integrated from the planning phase.

Who pays the price of data?

The tax treatment of data centers is also controversial. Should data centers benefit from reduced electricity tax like heavy industry or pay the same as regular consumers? Taxation not only guides investment but also builds long-term fairness. This, too, is not just a technical matter – it's political, involving value judgments.

This is not just a matter of differing opinions. It’s about the direction of Finland’s digital infrastructure, its economy, and energy use priorities. Policymakers must understand the whole picture, not just approve or deny individual building permits.

A Data-Based Decision to Act

And even though all of this is complicated – and one might want to just “datailla” (idle) – the decision to thoroughly assess the data center landscape is easy to make. Now is the right time to establish a cross-administrative working group to develop a national data center strategy for Finland. One where economics, security, energy, and the environment move in the same direction – not apart.

Only then might we finally stop "dataaminen". A decision based on information is not idling – it’s strategic.

Erdal Fere

The author is a consultant at Blic.