One of Europe’s largest ammunition manufacturers is facing a peculiar conundrum — it’s been unable to achieve its expansion plans and meet new demand quotas because a neighboring data center has been siphoning electricity in the area … to store TikTok videos.
“We are concerned because we see our future growth is challenged by the storage of cat videos,” Nammo chief executive officer Morten Brandtzæg told the Financial Times. Nammo is an international aerospace and defense company co-owned by the Norwegian Ministry of Trade, Industry and Fisheries and the Finnish aerospace and defense company Patria Oyj.
The ammunition manufacturer is experiencing a surge in demand because of the war in Ukraine and has recently set new targets for production. But the firm’s Raufoss plant in central Norway has no access to spare capacity for electricity in the area because all the energy is already being used up by a data center whose main client is the Chinese-owned video streaming site TikTok.
“We see an extraordinary demand for our products which we have never seen before in our history,” Brandtzæg said, adding that the demand for artillery rounds is up 15 times. Ukraine is using up about 6,000 rounds per day, and would like to go up to 65,000 if possible.
Data centers flocked to the Nordics precisely because electricity was once cheap and abundant. The colder climate also helps save on cooling costs. FT noted that TikTok is building three data centers this year with the option of building two more by 2025 in Hamar, which is about 25 kilometers from Raufoss. And unfortunately for Nammo, capacity in the area is provided on a first-come-first-served basis.
Experts believe that the transition to clean energy will herald more problems like this. More companies in the battery manufacturing and steel industries are also building in the Nordics. It will be critical for the government to prioritize which industries to supply first as providers strengthen transmission networks.
“For Europe, this is a major concern for industry: critical industry must have access to energy,” Brandtzæg warned. “I don’t think it’s a one-off, I think it’s a trend for the future.”
Data centers are estimated to account for 3.2% of electricity demand in the European Union by 2030 according to estimates from the European Commission, coming from 18.5% in 2018.
Information for this briefing was found via Financial Times, The Guardian, Twitter, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
