While big technology companies are expected to pour hundreds of billions of dollars into scaling up ​AI-related infrastructure this year, Europe has been lagging behind due ​to regulatory and energy constraints.

“The issue today is Europe doesn’t ⁠have the infrastructure,” Nokia CEO Justin Hotard told Reuters, while ​praising some of the European Union’s moves, such as the establishment of AI ​gigafactories.

“But I think when you look at the relative pace of investment, I’m not sure it’s enough. And it’s not just about putting these factories in. ​You need connectivity. You need data centre capacity.”

Data centres account for ​3% of the EU electricity demand, but their consumption is expected to increase rapidly ‌due ⁠to AI.

Amazon said in February that long delays to get power grid connections were challenging the company’s data centre expansion in Europe.

Nokia, a Finnish company once known for being the world’s largest phone manufacturer, is ​reaping gains from ​its push into ⁠AI. Its AI and cloud business now accounts for 8% of group sales, and the company expects that ​addressable market to grow by 27% annually until ​2028.

“We’ve seen ⁠the movie before, right? If you don’t build that infrastructure, then ultimately the business and the developers will move to where that is,” said ⁠Hotard, who left Intel to join Nokia last year.

“The ​reality is right now, that’s in China and in the US for the large ​part.”