Tier-1 vs. Tier-2 Data Center Locations: Shifting the Landscape
NDC-GARBE 10/03/2025
The data center industry is undergoing rapid transformation, which is reshaping how companies select their locations. Traditionally, cloud data centers have prioritized proximity to major network hubs. In Europe, this has led to high concentrations in Frankfurt, London, Amsterdam, Paris, and Dublin—collectively known as Tier-1 locations. However, with land and infrastructure in these areas becoming increasingly scarce, along with local governments imposing restrictions on power and water usage, the industry must now explore alternative options.
Unlocking New AI Data Center Locations
As available land, energy, and water resources diminish in Tier-1 locations, businesses are being forced to expand into new regions. AI-driven data centers, in particular, have massive power demands, making it crucial to position them in areas with sustainable energy capacity and access to key data clusters. As a result, major metropolitan areas in traditional Tier-1 locations are becoming less attractive.
Hyperscalers and their investment partners looking to develop AI data centers must now turn to emerging locations. To ensure long-term viability, it is critical that these sites guarantee sufficient power supply for at least the next five years and comply with energy efficiency regulations, such as waste heat reutilization for societal benefit. This is driving expansion into the outer edges of Tier-1 regions and the rise of Tier-2 and Tier-3 data center hubs—including Berlin, the Rhine region around Cologne and Düsseldorf, Vienna, Zurich, Milan, Madrid, Barcelona, Lisbon, Marseille, Manchester, and Warsaw.
NDC-GARBE: Tier-1 and Tier-2 Locations in Europe for AI Data Center Development
Collaboration Is Key in AI Data Center Development
Expanding into new locations and ensuring reliable power supply for AI data centers introduces additional risks for hyperscalers. This makes close collaboration with experienced development partners like NDC-GARBE essential. By leveraging expertise in site selection, planning, and pre-development, companies can make informed decisions and mitigate risks in new regions.
Are you considering building a new data center? Get in touch with us for expert consultation on planning and execution to ensure the success of your project.