Swedish company EcoDataCenter has raised a substantial $478 million in equity funding to accelerate its mission of building eco-friendly data centers, catering to the increasing demands of artificial intelligence (AI) compute providers. This investment brings the company's total equity funding to $966 million, solidifying its position as a leader in the sustainable data center space.

The funding, provided by a group of unnamed institutional investors, will be utilized to develop new technologies for more environmentally friendly data centers and to construct these facilities. This news comes on the heels of one of EcoDataCenter's major customers, AI compute giant CoreWeave, filing for an IPO in the United States.

EcoDataCenter has been at the forefront of building sustainable data centers, specifically colocation spaces where customers bring in their own servers and related hardware. The company's focus on eco-friendliness is particularly timely, given the significant power demands of large data centers. According to the International Energy Agency (IEA), these data centers have power demands of 100 MW or more, equivalent to the electricity demand of around 350,000 to 400,000 electric cars. The IEA also estimates that data centers collectively account for 1% of all global electricity consumption.

EcoDataCenter's commitment to sustainability is evident in its innovative approaches, such as being the first company in the world to use cross-laminated timber in its constructions. Microsoft has since followed suit, adopting this eco-friendly method. Additionally, the company utilizes renewable energy to power its buildings and continuously works on developing new approaches and materials for more efficient cooling and operations.

The company's customer base extends beyond tech, including prominent names like BMW. However, EcoDataCenter is perhaps best known for its partnership with CoreWeave and its involvement in the project to build the first Blackwell cluster in Europe, in collaboration with CoreWeave and Nvidia.

The significant size of EcoDataCenter's fundraise highlights the growing importance of data centers, particularly colocation centers, in the current AI hype cycle. This trend is not limited to Europe, as evidenced by the U.S. government's announcement of the $500 billion Stargate project, aimed at building mega AI data centers.

According to EcoDataCenter's CEO, Peter Michelson, the influx of infrastructure-type capital into the data center space is driven by the increasing tech orientation of real estate infrastructure. This convergence of real estate and technology may have played a role in the U.S. administration's support for the Stargate project, given President Trump's background in real estate.

As the demand for AI compute capacity continues to surge, EcoDataCenter's commitment to building sustainable data centers positions the company for long-term success. With the backing of its investors, EcoDataCenter is poised to make a significant impact in the industry, reducing the environmental footprint of data centers while meeting the growing demands of AI compute providers.