Eni & Khazna's 500 MW AI Data Center JV: A Blueprint for Europe's Sustainable Digital Future

The intersection of energy transition and artificial intelligence (AI) is no longer a distant ideal—it's now a tangible investment opportunity. Eni, Italy's energy giant, and Khazna Data Centers, the UAE-backed infrastructure firm, have announced a landmark joint venture (JV) to build a 500 MW AI-focused data center in Italy. This project, powered by Eni's “Blue Power” decarbonized energy, marks a critical step toward aligning Europe's digital ambitions with its climate goals. For investors, it's a chance to bet on a strategic synergy that could redefine the continent's tech infrastructure—and profits.

The Power of Synergy: Blue Power Meets Hyperscale Tech

The JV's cornerstone is its integration of Eni's advanced energy solutions with Khazna's hyperscale data center expertise. The 500 MW facility in Ferrera Erbognone, Lombardy, will be fueled by electricity from Eni's new Combined Cycle Gas Turbine (CCGT) plant, which employs carbon capture technology to reduce CO₂ emissions by an estimated 30–40%. This “Blue Power” is not just a marketing tagline: it represents a first-of-its-kind energy model in Italy, blending high efficiency with sustainability.

The partnership's value lies in its dual focus: delivering the computational horsepower needed for AI and high-performance computing (HPC) workloads while minimizing environmental impact. Khazna's global track record in designing energy-efficient data centers—such as its facilities in the Middle East—aligns perfectly with Eni's leadership in low-carbon energy. Together, they're creating a replicable model for a sector that currently accounts for 2% of global CO₂ emissions (a figure expected to rise as AI adoption surges).

Geopolitical Momentum and Italy's AI Hub Ambitions

The project is also a geopolitical play. The UAE and Italy formalized a broader strategic partnership in February 2025, aiming to build up to 1 GW of IT capacity on the Italian peninsula. The 500 MW JV is the first phase of this vision, backed by high-level political support. UAE Minister Reem Al Hashimi and Italy's Minister Adolfo Urso witnessed the signing of the Heads of Terms agreement, underscoring the project's role in strengthening bilateral ties.

For Italy, the data center positions it as a European AI hub. The facility's location in Lombardy—a region already home to tech clusters like Milan's fintech corridor—gives it access to talent and infrastructure. More importantly, it capitalizes on the continent's €200 billion AI investment pipeline through the EU's Digital Compass plan, which prioritizes sustainable tech infrastructure.

The Investment Case: Betting on Convergence

Investors should take note of two critical trends this JV embodies:
1. Energy Transition as a Service: Eni's shift from traditional oil and gas to decarbonized energy solutions (Blue Power) is a clear repositioning to meet demand for low-carbon industrial partners.
2. AI Infrastructure as a Growth Engine: Khazna's hyperscale expertise taps into the $80 billion global data center market, which is expanding at a 7.5% CAGR through 2030.

While Eni's stock has lagged peers due to oil market volatility, its pivot to sustainable projects like Blue Power could unlock new revenue streams. Meanwhile, Khazna's involvement in the UAE's IDCA collaboration hints at its ambition to dominate the Middle East and Africa (MEA) data center market—a region with 8% annual growth potential in digital infrastructure.

Risk Considerations and the Path Forward

The project isn't without risks. Permitting delays, energy cost fluctuations, and geopolitical tensions (e.g., EU-UAE trade disputes) could disrupt timelines. However, the JV's alignment with Italy's national AI strategy and the UAE's “Project 50” digital initiative reduces execution risk.

Recommendation: Allocate to the Synergy Play

For investors seeking exposure to the energy-AI convergence:
- Buy Eni: The stock trades at 10x forward EV/EBITDA, a discount to peers, but its Blue Power and JV with Khazna position it as a leader in sustainable industrial partnerships.
- Track Khazna: While private, its public-sector projects (e.g., UAE's Data Park) and strategic deals signal growth. Public peers like Equinix (EQIX) or Digital Realty (DLR) offer indirect exposure to hyperscale trends.
- Monitor EU Policy: The EU's proposed AI Act and carbon border tax could amplify demand for low-emission data centers.

The Eni-Khazna JV isn't just a data center—it's a template for how energy and tech can co-evolve. Investors who bet on this synergy stand to profit as Europe's digital and green transitions collide.

In a world hungry for both computation and sustainability, this Italian venture is where the future is being wired.