Amid all the hoopla surrounding artificial intelligence, the French Senate very quietly on the night of October 23 took the first step toward passing a piece of legislation that could have significant implications for the nation's digital future.
The measures are tucked into a bill originally introduced in the Spring dubbed la loi de simplification de la vie économique. The proposal was shelved over the summer amid the nation's political tumult and then the Olympics. But with a new government, the bill is moving forward again. Following approval by the Senate, the bill will now move to the French National Assembly for further debate and possible adoption before the end of the year.
Among the many reforms in this legislation are measures designed to facilitate the establishment of AI-ready data centers. Article 15 of the bill introduces a system of exemptions for data centers if they are declared to be in the “major national interest.” The law allows large-scale data centers to bypass some of the stringent urban planning regulations that often delay or halt such developments, aligning with France’s ambitious goals to accelerate its AI capabilities.
The core of the text reads:
A data center of particular importance due to its purpose and scale, particularly in terms of investment and installed power, may be designated by decree as a project of major national interest, if it is essential to the digital transition, the ecological transition or national sovereignty.”
For the application of the first paragraph, a data center is defined as an infrastructure or group of infrastructures used to host, connect and operate computer systems and servers as well as related equipment, for the storage, processing or distribution of data, as well as for directly related activities.
In such cases, building permits will be issued by the government, rather than by the mayor of the local community to speed things along. In addition, these projects will be entitled to “accelerated electricity connection procedures.”
The move comes amid a global boom in data centers driven by the demands of AI – especially GenAI – that is reshaping debates about land use, energy policy, and a long list of infrastructure issues. Even without this reform, the data center market in France has been on fire, drawing buckets of cash for construction and M&A deals.
The urgency – and opportunity – is being driven by the need to close a data center gap the country faces, which is a potential weak spot to its AI ambitions.
The Great AI Mobilization
The proposal followed the government's AI Commission’s March 2024 report which underscored the need for more data centers in France. The country currently lags behind other nations with only 250 data centers compared to 2,109 in the United States.
The data centers that do exist are not necessarily optimized for training AI models, including those used by globally recognized systems like OpenAI’s ChatGPT or Google’s Gemini. France’s comparatively limited data storage and processing capacity means that much of its data is processed abroad, which presents both economic and security risks.
AI models require immense processing power and vast amounts of data, making data centers essential to their operation. Industry experts predict that AI will account for up to 40% of data center capacity in France by 2030, doubling the country’s current capacity.
The country is already experiencing a massive wave of deals that don't tend to generate the sexy headlines of startup fundraising but involve valuations and checks that are counted in billions:
- Microsoft announced this spring it would invest €4 billion in new data centers, and as part of the deal signed Power Purchase Agreements to secure power from alternative sources. The company plans to build a new data center in eastern France and expand existing sites in the Paris region and Marseille.
- That news came during the Choose France summit where Amazon also unveiled plants to spend €1.2 billion on data centers in France.
- French asset manager AXA IM sold its stake in French data center firm Data4 to Brookfield Infrastructure in a deal valued at €3.5 billion.
- DataBank completed the sale of its five data centers in France (operating as “zColo France SAS”) to Etix Everywhere for €63 million.
- Altice France sold a 70% stake in its data center business for €535 million to Morgan Stanley Infrastructure Partners (MSIP), which created a new independent data center operator in France called UltraEdge. This new company now controls 257 data centers.
- Data4 intends to invest €2 billion euros in France and is currently building
and is currently building several data centers in Nozay, near Essonne.
Meanwhile, Paris is witnessing the final stages of construction on the nation's largest data center. Paris Digital Park, owned by US firm Digital Realty, will be one of 70 data centers sprinkled around Paris. It contains 40,000 square meters of computer servers and is roughly the size of 7 soccer fields.
Digital Sovereignty vs Ecological Goals
The development of data centers and AI is indeed a sensitive subject. According to the International Energy Agency, their electricity consumption could rise from 460 terawatt-hours (TWh) in 2022, or 2% of global demand, to 1,050 TWh.
They are already generating local tensions, as in Marseille, which is faced with eleven projects in addition to the five current centers. The city is considering a moratorium.
Data center operators are already focused on this topic. The Paris Digital Park will use only clean energy sources and has a number of carbon offset programs in place. The structure will also use new technology that reduces the resources needed to cool the servers.
While the government's reform bill wants to grease the tracks for data centers, it also maintains some key regulations around their carbon footprint. The legislation aligns with France’s 2023 Green Industry Act, which similarly sought to position key industrial developments as part of the nation’s ecological transition.
In this context, the government argues that the new data centers will not only provide the infrastructure needed to power AI but will also be designed to minimize environmental impact, and eventually replace more inefficient data centers.
Whether France can truly strike this balance will be crucial because if the new data centers put a strain on the nation's energy supply and costs, one can expect a sizable political backlash. Indeed, last summer on the eve of the Olympic games saboteurs cut fiber optic backbone cables and set telecom stations on fire, disrupting internet service for millions of residents.
If France wants to burnish its image as an AI and data center champion, the last thing the industry wants is thousands of citizens marching to protest data centers and attacking infrastructure.
