TL;DR:

• Nokia CEO Justin Hotard has warned Europe lacks the connectivity and data-centre capacity needed to compete for AI business, which is migrating to the US and China as a result.
• Data centres already account for 3% of EU electricity demand and that figure is expected to rise rapidly with AI, even as grid-connection delays block Amazon and others from expanding in Europe.
• Nokia itself is a case study in the opposite direction: its AI and cloud business now accounts for 8% of group sales and it expects the addressable market to grow 27% annually to 2028.

Nokia CEO Justin Hotard has warned that Europe’s infrastructure deficit is already costing the continent AI business, with data centres, developers and workloads migrating to the US and China — a warning that directly overlaps with UK grid-capacity and data-centre siting constraints.

The specific deficit

Hotard, who left Intel to join Nokia last year, told Reuters the issue is “infrastructure” in the broadest sense. He praised EU moves like the AI gigafactory programme but argued the pace of investment is too slow and that the problem is not just building factories but the supporting connectivity and data-centre capacity that makes them useful. Amazon has already publicly flagged that power-grid connection delays are constraining its European data-centre expansion. Data centres already consume 3% of EU electricity, and that proportion is expected to rise sharply as AI workloads scale.

The UK experience closely mirrors Hotard’s diagnosis. Britain’s energy department reported a 460% leap in grid-connection demand in the first half of 2025, with requests to join the high-voltage network totalling 96 GW — well above the UK’s total generation capacity of roughly 72 GW. The National Energy System Operator identified 140 data centres in the main queue representing about 50 GW, and has launched application-process reforms to weed out speculative projects and prioritise strategic sectors. Of 61 UK data-centre projects tracked since late 2022, only 7% have been built or are under construction, versus 46% in Germany and 40% in France.

Nokia’s own AI story

Hotard’s warning is notable because Nokia is not a neutral observer. The Finnish group’s AI and cloud business now represents 8% of group sales, and Nokia expects the addressable market to grow 27% annually to 2028. The company is benefiting directly from the infrastructure build-out Hotard says Europe is falling behind on. His framing — “if you don’t build that infrastructure, then ultimately the business and the developers will move to where that is” — is as much a statement about where Nokia will sell as a policy warning.

Looking Forward

For UK firms, Hotard’s diagnosis matters because grid-connection wait times of 12-15 years make most speculative data-centre bets effectively uneconomic. Expect AI infrastructure spend to concentrate around existing “powered land” sites with existing connections — north-east England industrial estates, former chemical sites, disused substations — while new greenfield projects quietly stall. The UK’s sovereign AI ambitions, backed by the recently-launched £500m Sovereign AI Unit, now depend less on compute procurement and more on whether grid reform can genuinely unblock strategic sites within a realistic timeframe.