Iberian Peninsula emerges as major European AI and data center hub

The Iberian Peninsula is emerging as a major European hub for artificial intelligence and data processing. A study commissioned by DE-CIX identifies the region as the world’s first “Distributed Digital Capital,” utilizing an interconnected ecosystem of Madrid, Barcelona, and Lisbon to provide the low-latency connectivity required for AI workloads.

This digital expansion is supported by a significant surge in data center development driven by abundant solar and wind resources in Spain and Portugal. According to Rystad Energy, the Iberian Peninsula is projected to account for approximately 11.5% of Europe’s installed data center capacity by 2030, nearly doubling its 2025 share of 5.8%. Spain’s capacity is expected to increase fourfold to 3.9 GW by 2030, while Portugal is forecasted to see the fastest growth rate in the region.

However, the rapid expansion faces several challenges. The high reliance on intermittent renewable energy may require increased investment in battery storage and hybrid plants to ensure stable power. Additionally, developers must navigate dwindling grid capacity, high temperatures, and limited water supplies, which could pose risks to future capacity outlooks.