Will Europe's infrastructure survive the AI surge?

The AI Revolution and the Need for Infrastructure Upgrades

The artificial intelligence (AI) revolution is transforming industries worldwide. Companies are increasingly adopting AI technologies, and more people are using them daily. Major AI companies continue to release new versions with enhanced capabilities. However, as AI becomes more prevalent, the question arises: Is the world’s infrastructure ready to support this rapid growth?

A recent study by telecommunications firm Nokia highlights concerns about Europe's preparedness for the AI surge. According to the report, many technology and business leaders in Europe believe that current networks require significant upgrades and investment to meet the demands of the AI supercycle.

AI Adoption in European Businesses

The survey reveals that AI is seen as a critical tool for boosting productivity and innovation. Two-thirds of businesses (67%) already use AI at least partially, while another quarter (15%) are running pilot projects. Executives are now aiming for AI-driven transformation across multiple areas.

In terms of short-term AI applications, cybersecurity leads at 63 percent. It is also above half in business process automation (57%) and customer service, including AI agents and chatbots (55%). Other areas include product development and innovation (48%), predictive analytics and decision-making (48%), robotics and intelligent systems (44%), and supply chain and logistics optimization (44%).

The Main Challenge: AI Infrastructure

The Nokia report titled “AI is too big for the European internet” states that while investment, talent, and power constraints remain critical, the deeper challenge lies in AI infrastructure itself.

“Today, the continent’s digital backbone is simply not set up for AI: high-performance connectivity is fragmented, and security is exposed,” the report states.

Energy as the Key Constraint

Energy emerges as the biggest constraint on Europe’s AI infrastructure, according to the report, which is based on a survey of over 1,000 European executives responsible for AI investment. Respondents included technology and business decision-makers, telecom and data center infrastructure providers, as well as companies and organizations planning to adopt and integrate AI into their operations.

“Europe’s ability to implement the technology at scale is colliding with the limits of energy production and the grid,” the report found.

Around nine in ten executives (87%) are concerned that Europe’s energy infrastructure cannot keep pace with AI demand. More than half (57%) say it is either at serious risk or already showing signs of stress.

These pressures are already being felt. One in five (21%) of firms say energy constraints are directly delaying AI projects, while another 28 percent have had to change project timelines or site selection.

High energy costs, often linked to aging infrastructure, are another concern. A majority of firms (52%) say Europe’s energy prices are already uncompetitive compared with global rivals. Some 40 percent of executives point to permitting delays, and 35 percent mentioned insufficient grid capacity or limited access to renewables.

Relocation for Cheaper Power

Three in five leaders (61%) at European firms are considering relocating some data-intensive operations to regions with cheaper power, or have already done so. Some 21 percent said relocation is on their radar but no action has been taken yet, while only 16 percent plan to stay regardless of energy access.

“With American AI and data center companies striking direct deals with nuclear power plants to secure energy for their projects, Europe has serious catching up to do,” the report said.

Internet Reliability Concerns

AI deployments place heavy demands on connectivity, and strains are already visible. More than half of firms (54%) report poor network performance, including latency, downtime or throughput issues linked to rising AI and data traffic.

Some 16 percent say these disruptions are materially affecting operations. A large majority (77%) of businesses are already experiencing connectivity problems even before making major efforts to scale up AI.

When asked about internet reliability as AI workloads scale up, 86 percent of European company leaders said they are concerned. This suggests that a large majority believe current networks are not yet equipped to handle widespread AI adoption.

Global Data Traffic Surge

Projections indicate that global data traffic will surge by five to nine times by 2033, and this will put unprecedented strain on Europe’s stretched networks.

“Without a decisive build-out of resilient and secure networks, Europe risks staying an AI ‘taker,’ reliant on others’ infrastructure and standards, rather than emerging as an ‘AI maker’” the report suggests.

Sovereignty and Digital Trust

The report also says that sovereignty has become the foundation of digital trust, with security seen as the key to making that sovereignty possible.

Sovereignty is one of the top priorities of European firms. 86 percent say it is very or extremely important to keep data and control within Europe. Some 73 percent consider sovereignty a crucial factor in infrastructure planning.

What Do European Firms Want?

To address these challenges, executives called for simpler and more consistent regulation across markets, faster access to spectrum, and changes to competition rules that would allow consolidation. They also emphasized the need for industry-wide investment in energy-efficient, AI-ready networks.