Europe is hallucinating a grand future of AI sovereignty and digital independence. But its power grids are structurally incapable of supporting it.

In her 2026 State of the Union address, European Commission President Ursula von der Leyen said the bloc’s technological sovereignty agenda should focus on moving AI “from the screen to the real economy”, from automated factory floors to precision agriculture and smart energy grids. Capturing that real-world value, she added, hinges on expanding the underlying physical infrastructure “in a clean and efficient way”.

With transatlantic relations strained by US President Donald Trump’s antics, the EU’s push for tech sovereignty is vital for its security and economic competitiveness. So far, however, the EU has led on regulation through the AI Act, while making little headway on the actual infrastructure buildout.

Von der Leyen’s rhetoric is backed by the European Commission’s Tech Sovereignty Package, an infrastructure-heavy regulatory push that includes the Chips Act 2.0 and the Cloud and AI Development Act, both aimed at reducing the EU’s dependence on foreign technologies by tripling the bloc’s data-centre capacity. As von der Leyen made clear, Europe “cannot afford to depend on others” for the technologies that underpin its economy and critical services.

Yet, as is so often the case in Brussels, ambition is running ahead of resources. Europe wants to build more AI data centres on grids that are already stretched to capacity amid an intensifying public backlash against data centre construction. The structural shock of decoupling from cheap Russian gas and the uneven shift to renewables have left Europe’s power grids unable to accommodate data centres’ electricity demand, let alone their “five-nines” reliability requirements. Data centres now consume a staggering 23% of Ireland’s electricity, taking up so much grid capacity that consumer utility prices are skyrocketing and emergency grid alerts are becoming more frequent.

In the vast, sparsely populated regions of the American West and South, hyperscalers can simply buy huge tracts of cheap land far from major cities. Europe doesn’t have that luxury, as its densely populated landscape forces tech giants, heavy industry, farmers and local residents to compete for the same grid connections and water supplies.

Grid strains, alongside concerns over data centres’ water consumption, have fuelled an intensifying backlash against the AI buildout. More than 70 projects across Europe were blocked, rejected, or heavily restricted in just the first four months of 2026, affecting an estimated US$42 billion in investments. Scotland has paused planning approvals for new hyperscale hubs to avoid repeating Ireland’s grid issues. Denmark has passed emergency laws to push data centre applications to the back of the grid-connection queue. And Finland has recently halted work on two multibillion-dollar Google data centres over environmental permitting failures.

Ironically, even the EU’s own flagship initiative – the €20 billion ( US$22 billion ) plan to fund five massive AI “gigafactories” – has been hampered by limited energy availability, bureaucratic delays and funding gaps, prompting private investors expected to co-finance the project to walk away.

A few trends could work in the EU’s favour, however, provided the bloc can move beyond grand declarations and embrace a more tactical approach. For starters, the deteriorating security situation in the Gulf – and Iran-linked kinetic attacks on data centres across the region – could redirect some investment in AI computing infrastructure toward Europe’s tier-2 and tier-3 markets.

Those projects will follow available energy and grid capacity. Governments’ willingness to help with grid expansion and new connections, rather than treating them as an afterthought, will be decisive. For example, Poland’s high-voltage transmission system operator, PSE, has proactively integrated digital infrastructure into its long-term network strategy, making room for up to three gigawatts of data centre capacity by 2036.

But future projects must also look beyond the grid connection and embed themselves in local industrial and utility ecosystems. This requires turning data centres from self-contained infrastructure projects generating a short-lived spike in construction employment into anchors for new businesses and AI readiness. Rather than placing a net burden on critical energy and water resources, data centres can help drive regional circularity by routing waste heat into municipal heating networks and industrial parks, reusing it for cooling through trigeneration and integrating with renewable energy sources.

Numerous pilots across Europe show that this model can work. In Finland, Google’s Hamina data centre works with more than 600 domestic suppliers in construction, telecommunications, electrical engineering and automation, while its utility partner Haminan Energia takes the waste heat and feeds it into the local district heating network, which could meet 80% of the town’s annual demand. In Sweden, EcoDataCentre is linking the local IT and manufacturing sectors to the wider energy economy by using surplus heat to dry biomass at a neighbouring wood-pellet factory. And at the Wellcome Genome Campus in the UK, recovered data centre heat will help meet the energy needs of a major life sciences research centre.

By bringing economic benefits to local communities and reducing emissions from energy use, such projects are also more likely to gain public acceptance. In Germany, for example, nearly three out of four residents consider data centres near residential areas more acceptable if their waste heat is used for municipal heating, while almost 80% of respondents support collaboration between data centres, energy suppliers and municipalities on the energy transition.

Ultimately, Europe’s AI future will depend less on policymakers’ declarations than on the ability of data centre operators to work with local industries and utilities. Projects that meet local economic and energy needs while advancing decarbonization stand a better chance of gaining public support.

Soňa Muzikárová is a non-resident senior fellow at the Atlantic Council and a former economist at the European Central Bank, a diplomat at the OECD and a senior adviser to the deputy minister of foreign affairs of the Slovak Republic.

Copyright: Project Syndicate