Accelerating Europe’s Digital Future: Microsoft Announces Plans for a New Datacenter Region in West Denmark

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Microsoft’s plan to establish a second datacenter region in Denmark reflects its commitment to advancing digital transformation and enhancing cybersecurity in the era of AI, further reinforcing the company’s dedication to Denmark and Europe.

Microsoft today announced a plan to expand the company’s footprint in Denmark and investments in European digital infrastructure with the intent to build a new, state-of-the-art datacenter region in Denmark. The new region will be Microsoft’s second datacenter region in Denmark, reinforcing the company’s commitment to meet Europe’s growing digital demand while advancing digital sovereignty and enhancing competitiveness for Danish and European organizations and communities.

The multi-billion USD investment is Microsoft’s largest in Denmark in the company’s 36-year history in the country. It builds on the recent investments in the Denmark East datacenter region, which will launch in the first half of 2026. In total, between 2023 and 2027 alone, Microsoft is investing $3 billion in datacenter capacity on Danish soil, and the planned expansion in Western Denmark will further increase this investment beyond 2027.

During construction, each site is expected to employ up to 1,200–1,400 workers at peak, with around 500 roles needed for ongoing operations when fully built out. Microsoft already employs nearly 1,000 people in Denmark and collaborates with more than 3,500 Danish partners and start-ups. In addition, Microsoft has pledged to help upskill 1 million Danes with AI competencies through the Danish AI Pact and recently announced a significant expansion of its quantum laboratory in Lyngby.

The Minister for Economic Affairs, Stephanie Lose, said:

“I am very pleased when large companies as Microsoft choose to make significant investments in Denmark and help create new jobs. I am confident that this new data center region in the municipalities of Esbjerg and Varde can help develop West Denmark and contribute to growth, new jobs and even greater progress.”

Building a cloud for Europe

When Microsoft announced five digital commitments to Europe in spring 2025, the first was clear: build a thriving AI and cloud ecosystem. The new datacenter region in Denmark brings that vision to life – strengthening Europe’s digital backbone and connecting it to a global network of cloud infrastructure.

Data centers power the world we live in, from online learning and health care to commerce and critical services. And the need is growing fast: according to DI Digital and the Danish Data Center Industry, Europe must triple its datacenter capacity by 2030 to keep pace with digital transformation and the rapid rise of AI.

Brad Smith, Vice Chair and President, Microsoft, said:

“Europe’s digital future depends on trust and resilience. By expanding in Denmark, we’re building the cloud and AI infrastructure that empowers growth, safeguards data, and strengthens Europe’s digital sovereignty.”

With Microsoft’s deep commitment to Europe, the company will have cloud operations in more than 200 datacenters across the continent, creating real-world capabilities to fuel business and manufacturing innovation, run national health systems, enable secure government services, and support digital tools in education – all while keeping data and operations close to home, subject to European laws and regulations.

Lars Sandahl Sørensen, CEO, Confederation of Danish Industries (DI), said:

“It is important and positive to see that Microsoft is investing on Danish soil in Danish digital infrastructure. As a region and as a nation, it is crucial that we recognize the need to significantly ramp up our investments in the technologies of the future. This is essential for our competitiveness and our prosperity. That is also why this investment is so beneficial.”

Enabling the local communities

The announcement that Microsoft intends to establish a new datacenter region in Denmark – with sites in the Varde and Esbjerg Municipalities – has been met with strong support from local leaders. Both municipalities have worked strategically for years to attract advanced digital infrastructure and technology-driven investments to the region. Microsoft’s investments in Denmark help pave the path to bring advanced digital infrastructure and technology to the region.

Mayor of Varde, Mads Sørensen, said:

“Varde Municipality has a unique connection to Europe’s entire energy grid, and we aim to leverage this advantage to attract businesses, jobs and new residents to our municipality. When an international company like Microsoft turns its attention to us and plans to invest in two data centers, it reinforces our confidence that our efforts to attract this type of company are working. We welcome the interest and look forward to entering into a closer dialogue with Microsoft.”

Mayor of Esbjerg, Jesper Frost Rasmussen, said:

“The establishment of a Microsoft Datacenter Region that includes Esbjerg and Varde Municipality sends a strong signal of confidence in our area. In the same year that Esbjerg was named Data Center Municipality of the Year, this development confirms our attractiveness for digital investments and our role as a future-ready hub. We will work constructively to ensure the project strengthens our local industrial landscape.”

Microsoft is committed to acting as a responsible local partner as plans for the new datacenter region progress. The company will work closely with municipalities, businesses, and community organizations to ensure the project delivers benefits for both people and nature. This includes implementing leading biodiversity and landscaping designs and partnering with Wadden Sea National Park on a restoration initiative to revive wetlands and boost biodiversity.

The investment also aims to create opportunities beyond infrastructure by supporting programs that advance STEM education, innovation, and social inclusion – strengthening Denmark’s position as a hub for digital skills and sustainability leadership. Collaboration with local stakeholders will help foster an attractive study environment in Southwest Jutland and contribute to long-term community prosperity.

Responsible operations will be a priority, with measures to reduce noise, apply sustainable construction practices, and set aside natural land areas for community benefit.

Commitment to Sustainable Operations

Microsoft’s new datacenter region in Denmark is designed with sustainability at its core. All electricity consumption will be matched with 100% carbon-free energy through long-term Power Purchase Agreements (PPAs), supporting Denmark’s green energy transition. In addition, in service of Microsoft’s Carbon Negative by 2030 commitment, Microsoft serves as the anchor buyer of carbon removal credits generated by Ørsted at its Kalundborg CO2 Hub and Copenhagen Infrastructure Partners and Vestforbrænding at their waste-to-energy facility in Glostrup.

Microsoft is developing a new generation of datacenters that optimizes AI workloads and consumes zero water for cooling. The datacenter region is being designed to take advantage of waste heat reuse, creating the possibility to deliver surplus heat to local communities if suitable offtake agreements and business cases are established.

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