The surge in demand for data centres, driven by the AI boom, has led startups to actively pursue venture capital funding for their physical data centre projects.

Namratha Kothapalli from Speedinvest reports that she has encountered approximately 50 data centre startups pitching their ideas over the past year, predominantly from France and Germany.

The landscape for data centre startups is expected to become increasingly crowded, with Kothapalli predicting significant growth in this sector in the coming year.

Notable startups such as Ori and Nscale have successfully attracted substantial funding, with Ori raising $140 million in February 2025 and Nscale securing $155 million in late 2024.

Investors are showing a preference for startups that innovate in areas related to data centre operations, such as cooling technologies and energy management, rather than those focused solely on traditional construction.

Many startups are integrating software solutions, or middleware, to improve data centre operations, particularly in job scheduling and energy optimization.

Jack Wang of Project A has noted a rise in pitches for full stack data centre startups, indicating a growing interest in this sector.

Successful ventures like Crusoe Energy, which has collaborated with OpenAI, demonstrate the potential for data centre startups, although new entrants may need to seek private equity funding.

Some venture capitalists believe that due to long development times and high risks, data centre startups might be more suited for private equity or infrastructure investment.

Despite the growing interest, many VCs remain cautious about investing in physical data centres because of high construction costs and significant operational energy requirements.

European governments are anticipated to ramp up investments in AI and data centres, with France committing €109 billion towards these developments, signaling a potential boom in local compute infrastructure.

In response to the current hype surrounding AI and data processing, some tech companies are rebranding themselves as data centre startups to capitalize on the trend.