New AI Factory Powered By Renewable Energy in Arctic

Norwegian investment giant Aker has revealed plans to construct a large-scale AI facility inside the Arctic Circle, capitalising on green energy and a growing Nordic tech race.

Major Investment With Strategic Ambitions

Aker ASA, the Oslo-based industrial investment firm controlled by billionaire Kjell Inge Røkke, has announced plans to establish a major artificial intelligence (AI) “factory” in Narvik, a coastal city in northern Norway. Located 220km within the Arctic Circle, the site is already prepped for construction and has access to 230 megawatts (MW) of clean energy.
Described by Aker as a “catalyst for industrial development, job creation, and export revenues,” the project positions itself at the heart of a growing international race to create energy-efficient data infrastructure for AI workloads. CEO Øyvind Eriksen said the new facility would help Norway seize a key opportunity in an evolving digital economy: “AI and data centres are becoming foundational to global business, and northern Norway is uniquely positioned to benefit.”

Start Work Later This Year

While the company has not yet disclosed a total construction cost or timeline for the facility’s completion, the site in Narvik is said to be “construction ready”, with early groundwork expected to begin later this year, pending partnership agreements. Negotiations with potential technology providers and anchor customers are currently underway.

What Is an “AI Factory” and Why the Arctic?

The term “AI factory” refers to a data centre designed to support high-performance computing (HPC), particularly the large-scale training and deployment of AI models. These facilities require huge amounts of electricity to power and cool thousands of graphics processing units (GPUs), the hardware typically used for advanced AI tasks.

In recent years, tech companies and infrastructure investors have turned to northern regions where natural cooling and cheap renewable electricity offer environmental and economic advantages. Narvik, with its access to stable, low-cost hydropower and cool year-round temperatures, provides precisely the conditions needed for sustainable AI operations.
For example, data centres in warmer climates often need complex and energy-intensive cooling systems. In Narvik, ambient air can be used for much of the cooling, significantly reducing operational emissions. Aker’s plan aligns with a broader trend across the Nordics, where countries are leveraging their green energy grids and favourable climates to attract the next generation of digital infrastructure.

Aker’s Portfolio and Strategic Focus

Founded in 1841, Aker ASA is one of Norway’s largest industrial investment firms. The company has long-standing interests in sectors including energy, marine biotechnology, oil and gas, and software. Its current portfolio includes Cognite, a software company that delivers industrial AI and data solutions, and Seetee, a digital assets firm that holds Bitcoin and invests in blockchain infrastructure. Both are majority-owned and operated through Aker’s tech division.

In its Q2 2025 earnings update, Aker reported a 7.4 per cent rise in net asset value, reaching NOK 66.5 billion (£4.9 billion). The company also confirmed it was consolidating its data centre activities under direct ownership, a signal that the Narvik development will form a core part of its long-term infrastructure play.

The move comes as part of a wider shift in Aker’s strategy, with CEO Øyvind Eriksen stating that AI represents “a new value chain,” and that Norway’s combination of political stability, clean energy and industrial expertise makes it an attractive location for such ventures.

Part of a Larger Nordic Trend

The Nordics (Norway, Sweden, Denmark, Finland, and Iceland) have emerged as one of the world’s fastest-growing regions for AI data infrastructure, drawing investment from tech giants and local firms alike. Last year, Google pledged €1 billion (£850 million) to expand its Hamina data centre campus in southern Finland, its seventh such expansion. Microsoft followed suit with a $3.2 billion (£2.5 billion) commitment to boost its AI and cloud capacity across Sweden.

Amsterdam-based Nebius, a cloud firm backed by Yandex co-founder Arkady Volozh, announced in October that it would triple GPU capacity at its Mäntsälä facility in Sweden. The site is now being scaled to run 60,000 GPUs dedicated to AI workloads, making it one of Europe’s most powerful AI installations.

Also, as a sign of increasing local innovation, Finnish startup Silo AI was acquired by chipmaker AMD for $665 million (£515 million) last year, underlining growing investor confidence in the region’s AI ecosystem.

Narvik’s Unique Position

It seems that Narvik is no stranger to strategic importance. For example, historically a transport hub for iron ore, the city now sits at the centre of what the Norwegian government calls “Green North”, a zone being positioned for energy-intensive industries powered entirely by renewable sources.

The site earmarked by Aker lies close to existing transmission infrastructure and has direct access to locally generated hydropower. According to Statnett, Norway’s national grid operator, the northern region benefits from surplus electricity and lower wholesale energy prices compared to southern parts of the country.

This abundance of clean energy has not gone unnoticed. Eriksen described the Arctic setting as “ideal for long-term, sustainable digital infrastructure”, highlighting the region’s potential to export data processing as a service, similar to how Norway exports energy and aluminium today. For example, the Narvik facility could process AI training workloads on behalf of global clients, using only renewable energy and naturally cooled systems, giving it a unique carbon advantage compared to data centres in North America or Asia.

Economic and Industrial Impacts

Aker says the AI factory will generate new local jobs in both construction and operations, while also stimulating the broader northern economy. Although specific employment numbers have not yet been released, regional leaders have welcomed the project as a sign of renewed industrial confidence.

Local authorities in Narvik have also indicated that they are keen to develop a technology cluster around the facility, offering incentives to secondary businesses such as equipment suppliers, repair services, and housing developments.

For Aker, the facility may strengthen its position in a growing sector while complementing its existing investments in digital infrastructure. By owning both the compute (via the AI factory) and the software layer (via Cognite), the firm may be able to offer vertically integrated industrial AI services to its portfolio companies and beyond.

UK and European businesses could benefit as well. For example, with growing pressure to decarbonise digital operations, firms may soon look to outsource high-energy AI processing to low-carbon providers, particularly those in stable jurisdictions like Norway.

Challenges and Concerns

However, the project is not without its critics. For example, some environmental groups have raised concerns about the true impact of AI-related energy use, arguing that even renewable-powered data centres could crowd out other local energy needs or require future grid upgrades.

There are also broader geopolitical and regulatory questions. The AI arms race has triggered export restrictions on high-end GPUs and computing technology, particularly between the US and China. For Norway, which remains outside the European Union but closely aligned through the EEA agreement, balancing access to global supply chains with national interests could become increasingly complex.

Also, while the Narvik site boasts favourable conditions today, questions remain around long-term cooling efficiency, particularly as GPU densities increase and water-based cooling becomes more common. Some analysts have cautioned that being early to market brings both opportunity and risk.

That said, Aker insists that its approach is grounded in long-term ownership and sustainability. In a statement accompanying the announcement, Eriksen said: “Our industrial DNA means we take a patient, value-creating view. This isn’t about short-term gains—it’s about building infrastructure that serves future generations of technology.”

More detailed timelines, costs, and partnerships are expected to be disclosed later this year.

What Does This Mean For Your Organisation?

If Aker succeeds in building a commercially viable AI facility powered by Arctic hydropower, it could set a new benchmark for how digital infrastructure is developed and operated in a low-carbon economy. While the company has yet to reveal the full technical and financial details, the decision to base the facility in Narvik reflects a deliberate strategy to align technological ambition with environmental responsibility. This positions Aker as not just a backer of industrial innovation, but a potential driver of regional transformation in northern Norway.

For Norway itself, the project signals an opportunity to diversify beyond oil and gas while still playing to its strengths in energy, engineering, and export-led industrial development. The Narvik factory is being framed as part of a new value chain, one where data, like oil before it, becomes a national resource to be harnessed and exported. That framing carries economic and political weight, especially as countries seek to balance growth with climate goals.

From a business perspective, the implications stretch beyond Scandinavia. For example, UK companies under growing pressure to meet sustainability targets could find that shifting AI workloads to greener, offshore compute centres is an attractive alternative to expanding domestic infrastructure. With corporate ESG commitments under scrutiny and AI workloads expected to surge, outsourcing to renewables-based facilities may become part of the commercial risk-reduction strategy.

Even so, the success of this model depends on the reliability and scalability of the energy supply, on keeping operational costs competitive, and on navigating geopolitical and supply chain uncertainty. As governments consider how to regulate AI, data sovereignty and infrastructure ownership will remain sensitive issues. In Norway and beyond, Aker’s Arctic AI factory may, therefore, serve as both a proving ground and a pressure test for the next chapter of sustainable industrial development.