Introduction
Italy is stepping into the spotlight as one of Europe’s fastest-growing data centre markets. Traditionally overshadowed by the FLAP-D cluster (Frankfurt, London, Amsterdam, Paris, Dublin), Italy is now attracting significant attention from global investors, hyperscalers, and AI innovators. This transformation is driven by a combination of strategic geography, accelerating cloud adoption, and the explosive demand for AI infrastructure.
Market Size and Growth Forecast
The Italian data centre market is projected to grow from approximately €7.5 billion in 2025 to €13.5 billion by 2030, representing a compound annual growth rate (CAGR) of 11–12%. In terms of IT load capacity, Italy is expected to expand from 1.08 GW in 2025 to over 4 GW by 2030, marking one of the highest growth rates in Europe.
This surge is fueled by:
- Hyperscale cloud deployments from global tech giants.
- AI-driven computing needs, requiring high-density, energy-efficient facilities.
- Public sector digitalisation programs, supported by EU recovery funds.
Milan remains the dominant hub, thanks to its connectivity to trans-European fiber routes and submarine cable landings. Rome and Southern Italy are emerging as secondary hubs, supported by government-backed initiatives and private investment.
Investment Momentum
Investment activity in Italy’s data centre sector is accelerating at an unprecedented pace. Industry reports indicate that Italy will attract up to €10 billion in new investments between 2025 and 2026, doubling the previous two-year period.
Key announcements include:
- Microsoft: A €4.3 billion investment to develop its Italian cloud region, reinforcing Italy’s role in global cloud infrastructure.
- AWS: Committed €1.2 billion over five years to expand its footprint.
- Khazna Data Centres & Eni: Planning a 500 MW AI-focused campus in Lombardy, part of a roadmap to install 1 GW of IT capacity by 2030.
- Local and regional players: Italian operators are partnering with international funds to scale operations and meet sustainability targets.
These investments position Italy as a strategic hub for AI workloads, cloud services, and edge computing in Southern Europe.
Strategic Drivers
Several factors underpin Italy’s attractiveness for data centre development:
1. Geographic Advantage
Italy’s Mediterranean location offers low-latency connectivity to Europe, Africa, and the Middle East, making it ideal for global cloud and AI traffic routing.
2. Energy Transition and Sustainability
Operators are investing heavily in renewable energy integration, advanced cooling systems, and waste heat recovery to comply with EU climate targets and reduce environmental impact.
3. AI and HPC Demand
The rise of generative AI and machine learning workloads is creating unprecedented demand for high-density, energy-efficient facilities. Italy’s growing AI ecosystem amplifies this trend.
4. Regulatory Evolution
After years without a dedicated framework, Italy is now studying a specific bill on data centres, signaling a move toward clearer national standards. For now, the country aligns with EU directives such as the Energy Efficiency Directive, which mandates reporting on energy performance and waste heat recovery for large facilities.
Challenges and Risks
Despite strong growth prospects, the sector faces several hurdles:
- Power Availability: Grid constraints and high energy costs remain critical issues for large-scale deployments.
- Local Opposition: Community resistance to new facilities, seen in other markets, could slow project timelines.
- Skills Gap: The industry requires specialized talent to manage complex infrastructure and sustainability compliance.
Regional Hotspots
- Milan: The undisputed leader, hosting the majority of hyperscale and colocation facilities.
- Rome: Emerging as a secondary hub, driven by government projects and enterprise demand.
- Southern Italy: Poised for growth due to submarine cable landings and renewable energy potential.
Future Trends
Looking ahead, several trends will shape Italy’s data centre landscape:
- Edge Computing: Demand for low-latency services will drive smaller, distributed facilities closer to end-users.
- AI Factories: Dedicated campuses for AI training and inference will become a cornerstone of infrastructure planning.
- Green Data Centres: Sustainability will remain a top priority, with operators adopting innovative cooling and energy recovery solutions.
Conclusion
Italy’s data centre market is entering a golden era. With billions in investments, a strategic geographic position, and growing AI demand, the country is set to become a critical node in Europe’s digital infrastructure. While challenges remain, particularly around energy and regulation, the outlook is overwhelmingly positive. For investors, operators, and technology providers, Italy represents one of the most compelling opportunities in the European data Centre landscape.
For further information, please contact:
Antonella Ceschi, Partner, Bird & Bird
antonella.ceschi@twobirds.com
