TikTok to Invest 1 Billion Euros in Building Data Centre in Finland

By Supantha Mukherjee and Anne Kauranen

STOCKHOLM/HELSINKI (Reuters) -TikTok has announced plans to invest 1 billion euros ($1.14 billion) in constructing its first data centre in Finland. This move comes as the popular social media platform shifts data storage for its European users to the continent. A TikTok spokesman confirmed the investment on Wednesday, but declined to provide further details, citing information from sources familiar with the matter.

Finland’s Prime Minister’s office has not yet responded to requests for comments regarding the development. TikTok, owned by China-based Bytedance, has been working to address concerns over potential access by the Chinese government to the data of European citizens using the platform. In response, TikTok launched “Project Clover” in 2023, a data security initiative involving a 12 billion euro investment over 10 years. This move comes amidst increasing pressure from lawmakers on both sides of the Atlantic.

Various countries, the European Parliament, European Commission, and others have restricted TikTok’s usage on staff phones due to privacy worries. Additionally, the U.S. government has threatened to ban the app unless its U.S. assets are divested on national security grounds. TikTok has defended itself against these bans, claiming they are based on misconceptions. The platform states that European user data is stored in a dedicated European data enclave across data centres in Norway, Ireland, and the U.S.

As part of Project Clover, TikTok’s first data centre in Norway recently went fully operational after construction began in 2023. With over 175 million users in Europe, TikTok plans to announce additional data centres in the coming years. Nordic countries, including Finland, have become appealing locations for data centres due to lower energy costs resulting from colder temperatures and access to cheap, emission-free electricity. Microsoft President Brad Smith highlighted Finland’s advantages, citing carbon-free energy and strong connectivity as key factors in infrastructure development.

According to Veijo Terho, chairman of the Finnish Data Centre Association, more than 20 new data centres are in the pipeline for Finland, with a combined value of around 13 billion euros and a capacity of 1.3 gigawatts. This surge in data centre investment highlights Finland’s growing importance as a hub for technology companies seeking efficient and sustainable data storage solutions.

(Reporting by Supantha Mukherjee in Stockholm, Anne Kauranen in Helsinki, and Foo Yun Chee in Brussels; Editing by Elaine Hardcastle)