hscale was officially launched this year. Can you share the story behind its creation?
hscale is backed by Bain Capital, one of the world’s leading investment firms. Bain had already made substantial data center investments in Asia and the U.S. before deciding to create a major platform for Europe.
Our focus is on large data center developments, targeting large tenants like the top-tier cloud providers, such as Amazon, Microsoft, and Google. We specialize in delivering large campuses that can be sold as a single building or multiple buildings to a single tenant. In the world of AI, while large-scale campuses in the U.S. focus on base model training, our focus in Europe is more on the deployment of existing large language models.
What makes Europe an attractive region for hyperscale expansion right now?
It has been an interesting region for expansion for some time already. Europe has a cloud adoption rate of about 50%, with many markets still under developed compared to the US. This makes it an attractive region for traditional cloud business cases, such as infrastructure-as-a-service, which continue to grow at a double-digit rate. With the rise of AI, demand for cloud services is expected to spike further. While base model training isn't as prevalent in Europe, AI models consume significantly more energy and compute power, driving additional demand.
Several industry peers have noted that Europe is trailing behind the U.S. and Asia in terms of technology. Do you share this view?
Yes, in some ways, particularly regarding AI models. Currently, the U.S. and China dominate in AI product development —European countries like Germany have excelled in AI science but not product deployment.
However, I don’t think it’s a major issue; Europe still has a lot of potential to become a leader in certain areas, particularly with AI use cases in industrial production, where it has a strong historical advantage. The success of large language models is dependent on the infrastructure that currently exists, mostly in the US. However, Europe has vast amounts of valuable data, which will be crucial for future AI use cases.
Bain Capital has committed multi-billion-euro investments into hscale. How do you prioritize where to allocate this capital across Europe?
We have a strategic approach to evaluating potential locations for capital deployment. We focus on what we call the "Flapd" markets—Frankfurt, London, Amsterdam, Paris, and Dublin—which are well-established with high demand. However, their growth potential is limited due to constraints in land and power availability. As a result, we're also targeting "Tier 2+" markets such as Milan, Madrid, and Oslo, which we see as the next wave of growth. Our assessment indicates that the majority of future expansion will come from these emerging markets.
How fast do you expect the company to scale?
We expect substantial growth in Norway. We have secured a large land parcel for a site capable of hosting 150-300 megawatts in two phases. It's important to note that the typical delivery cycle for a data center is about three to four years.
How competitive is the data center space in Europe?
The data center market in Europe is competitive but still has more demand than supply. We’ve seen many startups joining the club over the last six to 12 months. However, the barriers to entry have increased significantly, as the scale of data centers has grown, leading to higher investment requirements and greater risk for individual projects. There are relatively few companies globally with the resources to fund such large-scale initiatives.
At a high level, there are two main trends: well-backed players aiming to address the entire European market, and niche players focusing on specific markets with more local expertise.
What sets hscale apart from its competitors?
Our backing from Bain Capital certainly helps, but what sets us apart is our experienced team, which has a proven track record of delivering on commitments. As a new market entrant, we also have the unique ability to design for the future, particularly at this critical inflection point in the industry.
The shift from traditional cloud computing to AI has driven the need to transition from air-cooled data centers to liquid-to-liquid cooled solutions.
While air-cooled systems are still used for certain applications, such as storage, high-performance computing and GPUs now require liquid cooling. Our ability to switch between technologies is a big advantage.
How are you balancing the high energy demand typical of data centers with Europe’s sustainability standards?
Sustainability is deeply integrated into our business model. Our base design for data centers is inherently more energy-efficient than many competitors' designs. This not only helps reduce operational costs but also aligns with our commitment to sustainability. For instance, in Madrid, we’re developing a campus next to a large solar park, using renewable energy on a significant scale. The strategic partnership between Bain Capital and Aquila Group further strengthens this commitment, as together we are building a leading sustainable data center platform across Europe, leveraging Aquila’s expertise in clean energy and setting new sustainability standards for data center operations. Sustainability is now a foundational aspect of how we operate.
hscale’s mission expands well beyond Europe, into the Middle East and Africa. When will these come into focus?
While Europe is our primary focus, we’re actively investigating opportunities in the Middle East. As for Africa, the market is still developing with limited cloud deployments outside specific locations like South Africa, Kenya and Nigeria, which are connected by sea cables. The geographic challenges and differences in communication infrastructure make Africa a very different market from Europe and the Middle East.
What technology trends or innovations are you personally excited about?
I’m particularly excited about the consumerization of AI. While much of the focus has been on improving workforce productivity through AI, I find it interesting how AI can enhance the daily lives of individuals. In the near future, AI could act as a personal assistant, helping people manage tasks and providing more free time to focus on other activities. It’s a unique opportunity to use AI not just for work, but to improve personal lives and well-being.
