Microsoft Announces Major Multi-Billion Dollar Cloud Region Investment in Denmark for 2026
December 11, 2025
Microsoft has unveiled plans to launch a new cloud data center region in Denmark in 2026, marking a significant expansion of its European digital infrastructure. The move underscores the intensifying competition among hyperscalers to secure strategic locations with robust renewable energy resources and supportive regulatory environments to meet growing enterprise and AI-driven cloud demand.
The new region, to be named "Denmark East," will consist of multiple data center facilities. Key locations include new builds in the municipalities of Esbjerg and Varde in West Denmark, complementing Microsoft's existing projects in the capital area and on the island of Zealand. While the tech giant has not disclosed the precise financial outlay, Henrik Hansen, CEO of the Danish Data Center Industry (DDI), characterized the project as a "multi-billion dollar investment" in a LinkedIn post.
This development is the culmination of a strategy Microsoft first signaled in late 2020. Since then, the company has laid the groundwork through power purchase agreements (PPAs) for renewable energy and investments in local carbon capture initiatives. The new region is committed to matching 100 percent of its energy consumption with carbon-free energy sources via long-term PPAs. A notable sustainability feature of Microsoft's Danish operations includes a project in Høje-Taastrup, announced in 2024, which will channel waste heat from a data center to warm local homes.
Local officials and Microsoft executives highlighted the broader economic and digital transformation implications. Mette Kaagaard, CEO of Microsoft Denmark and Iceland, stated, “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.”
Stephanie Lose, Denmark's Minister of Economic Affairs, welcomed the investment, expressing confidence that it "can help develop West Denmark and contribute to growth, new jobs, and even greater progress.” The announcement solidifies Denmark's position as a key Nordic hub for cloud infrastructure, where Microsoft will compete with rivals like Google, which operates a data center in Fredericia, and Amazon Web Services, which has a Local Zone in Copenhagen.
Source: datacenterdynamics
Microsoft Announces Major Multi-Billion Dollar Cloud Region Investment in Denmark for 2026
