Microsoft commits to European datacentre footprint growth despite ‘geopolitical volatility’

Microsoft is preparing to increase its European datacentre capacity by 40% over the next two years and will appoint a board of directors to oversee its continental server farm operations.

The plans are part of a five-point set of “digital commitments” from Microsoft, designed to “uphold Europe’s digital resilience” and protect the privacy of data stored on the continent in support of its plans to build a broad artificial intelligence (AI) and cloud ecosystem.

“To further cement the nexus between Microsoft and Europe, going forward our European datacentre operations and their boards will be overseen by a European board of directors that consists exclusively of European nationals and operates under European law,” said Microsoft, in a blog post dated 30 April 2025.  

The post also shared details of the company’s plans to expand its server farm footprint across 16 countries – including the UK. This means Microsoft’s European datacentre capacity will more than double between 2023 and 2027, the post added.

The company cited concerns about “geopolitical volatility” as a driving force behind the roll-out of its “digital commitments” and its plans to build out its European datacentre capacity.

“We recognise our business is critically dependent on sustaining the trust of customers, countries, and government across Europe,” said the post, authored by Microsoft vice-chair and president, Brad Smith. “We respect European values, comply with European laws, and actively defend Europe’s cyber security.”

Smith continued: “In a time of geopolitical volatility, we are committed to providing digital stability … [and this starts] with an expansion of our cloud and AI infrastructure in Europe, aimed at enabling every country to fully use these technologies to strengthen their economic competitiveness.”

Our business is critically dependent on sustaining the trust of customers, countries, and government across Europe. We respect European values, comply with European laws, and actively defend Europe’s cyber security

The news comes several weeks after an analyst note from TD Cowen surfaced in late March 2025 that revealed Microsoft had seemingly abandoned a planned 2GW increase in its datacentre capacity across the US and Europe in the past six months due to its softening relationship with OpenAI.

In a statement to Computer Weekly at the time, Microsoft played down the shift in its datacentre expansion strategy, pointing out it had added more capacity “in any prior year in history” during 2024.

“While we may strategically pace or adjust our infrastructure in some areas, we will continue to grow strongly in all regions,” the company added.

The blog post offers some insight into how Microsoft plans to do that, with Smith sharing details of the company’s plans to increase its sovereign datacentre capacity in Germany for the public sector through a collaboration with SAP and Arvato Systems.

This collaborative approach to increasing its datacentre capacity seems to be a model that it plans to adopt in other areas of Europe.

“We recognise that European governments likely will consider additional options. Some of these may involve public financing to support European home-grown offerings,” the blog post continued.

“We recognise the importance of a diversified technology ecosystem, and we are committed to collaborating with European participants across the tech ecosystem.”

The company said it would also “vigorously contest” any government order to suspend or cease its cloud operations in Europe, and – as a show of its commitment to this – will include legally binding clauses in its contracts with European government entities.

“We are confident of our legal rights to ensure continuous operation of our datacentres in Europe,” said Microsoft. “And we are prepared to back this confidence with our contractual commitments to European governments.”