Microsoft has announced plans to establish a new, state-of-the-art datacenter region in Western Denmark, marking the company’s largest single investment in its 36-year history in the country.
The new region, located across the municipalities of Esbjerg and Varde, will complement the upcoming Denmark East datacenter region set to launch in 2026.
Mette Kaagaard, CEO of Microsoft Denmark and Iceland, tells DDI: “This investment is more than a data center. It reflects the strong momentum in Denmark’s digital and energy ecosystem. By expanding here, we are building essential cloud infrastructure while strengthening local partnerships and supporting the long-term growth of the Varde and Esbjerg region.”
The announcement reinforces Denmark’s role in supporting Europe’s accelerating demand for cloud and AI infrastructure. According to a recent report by Danish Data Center Industry (DDI) and DI Digital, Europe must triple its datacenter capacity by 2030 to keep pace with digital transformation and the rapid rise of AI-driven services.
National and Industry Leaders Welcome the Decision
The scale and strategic importance of the announcement has prompted strong support at the national level as both a regional opportunity and a contribution to Denmark’s broader digital competitiveness.
Stephanie Lose, Minister of Economic Affairs, 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.”
Henrik Hansen, CEO of the Danish Data Center Industry, adds: “This project shows what is possible when companies, municipalities, and local partners work closely together. The data center industry contributes far more than digital capacity. It brings long-term collaboration, new opportunities for local businesses, and solutions that support community development across the region. This strong tradition of cooperation gives Denmark a real competitive advantage in attracting future digital investments.”
Local Communities at the Center of Development
The municipalities of Varde and Esbjerg, both of which have worked strategically for years to attract advanced digital infrastructure, welcomed the announcement as a significant step for regional development.
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, comments "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."
The intended investments aim to support long-term community development by fostering local cooperation, advancing STEM education, and contributing to social inclusion. Microsoft has also emphasized a commitment to responsible operations, including biodiversity initiatives, sustainable construction practices, and designing facilities that enable future opportunities for community-oriented solutions.
A Strategic Step for Denmark and Europe
Microsoft’s planned West Denmark datacenter region forms part of the company’s broader effort to build a “cloud for Europe;” placing digital infrastructure close to users and supporting competitiveness, digital sovereignty, and a secure regulatory environment. In line with Microsoft’s sustainability commitments, all electricity consumption will be matched with 100% carbon-free energy through long-term Power Purchase Agreements.
Microsoft is also developing a new generation of datacenters optimized for AI workloads and designed to use zero water for cooling, alongside exploring options for future surplus heat delivery where suitable agreements and business cases can be established.
Contact us
Christine Kjær Jacobsen
Marketing & Communication Manager
chja@datacenterindustrien.dk
+45 2975 2932