EU Data Center Efficiency Rules Could Clash With AI Ambitions, Industry Warns

The European Commission last week introduced a broad digital sovereignty package that includes new data center efficiency reporting and labeling requirements. Industry groups warn the measures could deter AI investment at a time when Europe is trying to catch the US and China.

The package, announced by Commission President Ursula von der Leyen on June 8, includes the Chips Act 2.0, the Cloud and AI Development Act, and a Strategic Roadmap for Digitalization and AI in Energy. Data center operators face mandatory efficiency reporting and performance targets under the proposed rules.

Efficiency Rules vs. AI Growth

Data center industry groups argue that the new reporting and labeling requirements could slow deployment of AI infrastructure. Europe already lags behind the US in homegrown cloud and AI companies, and the rules may push projects to other regions. The Commission says the measures are needed to ensure energy grids remain stable as data center power demand surges.

• European data center power demand is projected to grow 28% by 2030, driven largely by AI workloads.
• The EU aims to cut data center energy use 15% by 2030 through efficiency standards.
• US hyperscalers like Google and Microsoft are building AI data centers with dedicated power plants, a model Europe may struggle to replicate under strict grid rules.
• Memory supply for AI servers is tightening as fabs reach full allocation, a coalition of chip buyers warned in a separate report.

Google Tests Power-First Model in Texas

Google is piloting a new approach to AI data center development in Texas. The company is pairing a data center with 1 gigawatt of dedicated generation capacity, a model it calls power-first. The campus is designed to bypass grid constraints by building its own power supply, a strategy that could become more common as utilities struggle to meet hyperscaler demand.

The power-first model highlights the tension between AI growth and energy regulation. In Europe, where grid interconnection is complex and permitting can take years, such approaches are harder to execute. The EU's efficiency rules may further complicate efforts to secure dedicated power for AI facilities.

Meanwhile, the White House issued an executive order on June 4 that establishes a voluntary framework for early government access to frontier AI models. The order also invests in federal cybersecurity for AI systems. Unlike the EU's mandatory approach, the US framework relies on voluntary cooperation from AI developers.

What comes next: The European Parliament will debate the sovereignty package over the summer. Data center groups plan to lobby for exemptions or delays to the efficiency rules. Google's Texas campus is expected to come online in 2027, and its success could influence how other hyperscalers approach power planning in regulated markets.