AI Is Becoming the New Electricity, but Are We Buying It From Competitors or Producing Our Own?

AI Eesti co-founder Ralf-Stiven Viru. Photo: AI Eesti

Artificial intelligence is becoming the new electricity, and AI factories are the producers of this economy-driving "spark." An AI factory is a high-compute-capacity center where AI models are developed, trained, and deployed. If a data center is a warehouse for data, then an AI factory is like an industrial production line where raw data is transformed into reliable models that impact every sector from healthcare to manufacturing and enable smarter services.

Last year, 40 significant large AI models were created in the US, 15 in China, and only three in all of Europe. US tech giants use mega-clusters running millions of processors. China is building state-backed centers that serve both business and government simultaneously. Europe has so far been more of a user than a creator. Among AI factory operators in the region are at least Nscale, Nebius, Scaleway, and atNorth.

The biggest difference lies in infrastructure. Meta is building a $10 billion AI center in Louisiana that will grow Meta's GPU count to 1.3 million. A project of this scale exceeds even the most ambitious known European plans many times over. The European Commission is still talking about giga-factories with 100,000 chips. If Estonia and Europe do not build their own "power plants," meaning AI factories, we will remain dependent on the goodwill of others.

Why should Estonia care?

Estonia has unique datasets and digital services: state information system logs, Estonian-language text corpora, and e-service usage patterns. This is material that could be used to train AI models tailored to Estonian needs. But without local or European infrastructure, models must be trained in US cloud environments at high cost, slow speed, and on uncertain legal grounds.

A sovereign AI factory ensures:

• Data control and security. Sensitive data does not have to leave Europe.
• Speed and competitive advantage. Developing models in weeks, not months or years.
• Preserving the Estonian language and culture in the digital space. Large global models are not interested in small languages.
• Retaining talent. World-class compute power attracts scientists and engineers.

Estonian companies can only benefit from AI if they have access to top-tier compute power. Otherwise, we remain users, not creators.

What happens if we wait?

Estonia's biggest risk is not a wrong decision, but indecision. Over the past decade, we have created processes that drag on: studies, opinions, multiple rounds of proceedings. Major investments end up choosing another country. We have lost Google's data center in Paldiski, a major Fibenol factory, a cellulose plant, and a series of projects that are never discussed publicly. The reason is simple: we lack available production land and the planning process is slow. Investors do not wait years while we debate each project individually.

This is the same problem that hinders AI infrastructure development: energy plans, general plans, permit procedures. If Estonia wants to be a winning country, it must make fast and clear decisions. Projects exceeding 100 million euros should receive a fixed-timeline process with clear standards, firm deadlines, and specific accountability.

If we wait, we will inevitably regress to being importers. We will pay license fees to US and Chinese companies. Our firms will compete on global markets with weaker technical capabilities. The best data scientists will move to countries with top-tier infrastructure. The Estonian language will become a sideshow in the digital space, because no one else will train models adapted to our language.

Estonia does not need to build a ten-billion-dollar center on its own. We need to make ourselves attractive, as Lithuania, Poland, and Finland are already doing, having marketed themselves for years as world-class locations for data centers and AI factories.

Estonia should position and publicly market itself as a suitable country for AI factories. International technology companies need a clear message that we offer favorable electricity prices for large consumers, a cool climate that reduces cooling costs, good connectivity, and fast permit processes.

AI factories are the foundation of the new economy

AI factories are the infrastructure of the 21st century, determining the competitiveness of economies and nations just as surely as electrical grids did in the 19th century. The question is no longer whether we need them. The question is whether we want to be a country that creates AI solutions or a country that downloads others' creations.

AI will become the baseline capability of the economy over the next decade. If we want Estonian companies to compete on equal terms, the state must create the conditions for bringing AI factories here: a stable energy policy, access to data, and clear rules. We either build the infrastructure that supports innovation or settle for the role of buying it from competitors. The choice is ours.