English Version
The Renaissance of the Economics of Location in the Age of Artificial Intelligence
Why Location Decisions Are Becoming Geoeconomic Decisions
Summary
Artificial intelligence is often portrayed as a technology that is largely independent of geography. In reality, however, it relies on extensive physical infrastructure. Data centres require energy, robust electricity grids, high-capacity digital networks, suitable land, and stable institutional conditions. The essay argues that the economics of location provides a valuable framework for understanding the geography of AI investment. Alongside traditional location factors, access to industrial data, sector-specific knowledge and regional innovation ecosystems is becoming increasingly important. Corporate location decisions are therefore also acquiring a geoeconomic dimension.
Core Arguments
- Artificial intelligence is not placeless: data centres and cloud infrastructure depend on energy, networks, land and reliable institutional conditions.
- Classical location factors remain relevant, even as technological change alters the way firms organise production and innovation.
- Industrial data, sector-specific knowledge and regional innovation ecosystems are becoming strategic location factors, constituting a geoeconomic dimension.
- Europe could connect its different regional strengths rather than pursue a single, uniform model of AI development.
- Europe could become an integrated innovation ecosystem in which regions specialise according to their comparative location advantages in hyperscale data centres, customer-proximate data centres, cloud and AI infrastructure, and AI applications.