European startups tackle the tech industry's AI power shortage
As global data centre electricity demand could nearly double by 2030, a group of European startups is building software that squeezes more capacity out of existing grid, facility and computing infrastructure. Investors argue this software layer, not new power plants, offers the faster fix.
According to the International Energy Agency, global data centre electricity demand is projected to grow from roughly 485 terawatt-hours in 2025 to around 950 terawatt-hours by 2030, expanding more than four times faster than electricity demand in other sectors. Much of Europe's existing grid capacity remains underused, and building new transmission lines and substations takes far longer than deploying software that better manages what already exists.
Four layers of efficiency
Analysts at investment firm Future Energy Ventures have identified a small cluster of European companies working across four segments. At the grid level, firms such as Amsterdam's Sympower and Dublin's GridBeyond turn data centres and industrial energy users into flexible grid assets, bidding their demand into balancing markets across several European countries. Munich-based Entrix optimises battery storage trading, while Finland's Capalo AI had contracted more than 1 gigawatt of battery storage by the end of 2025 and has expanded into Poland and Bulgaria.
At the facility level, Darmstadt's etalytics optimises cooling and power systems inside data centres using AI combined with physics-based digital twins. Clients including NTT and Telehouse have achieved cooling energy savings of up to 19%, and the company received backing from Microsoft's venture arm M12 in 2025.
At the compute level, Paris-based FlexAI and Bristol's YellowDog build software that distributes AI workloads across hardware from different vendors. At the software level, San Sebastián's Multiverse Computing compresses large language models by up to 95% using quantum-inspired methods, having raised significant funding in 2025.
Analysts note that no company currently connects all four layers into a single system, and this gap between grid, facility and compute decisions may represent the next major opportunity for founders in the sector.
