EXCLUSIVE-TikTok to build a second billion-euro data centre in Finland

By Supantha Mukherjee and Anne Kauranen

HELSINKI/STOCKHOLM, April 8 (Reuters) - TikTok plans to invest 1 billion euros ($1.16 billion) to build a second data centre in Finland in less than a year as it moves data storage for European users to the continent, company officials said on Wednesday.

The announcement comes as TikTok's Chinese parent ByteDance in January avoided a U.S. ban over data protection concerns and as European nations ratchet up pressure on social media companies to protect children from their addictive algorithms.

TikTok said it was making a new 1 billion euro investment in a data centre with an initial capacity of 50 megawatts (MW) and a total potential capacity of 128 MW in Lahti, located in southern Finland.

The investment is part of the company's "12 billion (euro) European data sovereignty initiative delivering industry-leading protections for the data of over 200 million European users," it told Reuters.

CONCERNS OVER DATA PROTECTION

Finland has become a magnet for data centres as companies including Microsoft and Google look to curb energy costs and meet climate goals, drawn by the country's cold climate, low-cost and low-carbon electricity, and a stable, business-friendly regulatory environment within the European Union.

But Finnish politicians were alarmed by TikTok's plan for its first data centre in Finland after Reuters revealed it in April last year.

While Finland's defence ministry had approved the investment in 2024, politicians had not been informed. Finland's then-minister of economic affairs Wille Rydman last year called for the project to be "reconsidered" due to security concerns and lack of openness around the company's plans.

"At the very least, I would hope that this property development company would reconsider once more whether it really wants TikTok as its tenant," Rydman told Finland's public broadcaster Yle, referring to TikTok's local partner.

TikTok said its European user data is currently stored with enhanced safeguards across three data centres in Norway, Ireland, and the U.S. Its first Finnish data centre in Kouvola is to be operational by the end of this year, with the second one up by 2027.

The mayor in Lahti celebrated the fresh investment decision.

"In the context of Lahti, the investment is substantial. We are pleased that a main tenant agreement has been signed and that the project is progressing as planned," Lahti Mayor Niko Kyynarainen said in a statement.

($1 = 0.8654 euros)